March 15, 2002, the PPP/C Government presented its tenth successive budget
to the National Assembly. This third budget presentation by Minister of
Finance - Mr. Saisnarine Kowlessar was done at the first sitting of the
National Assembly for the year 2002.
independent Stabroek News, in a feature on Budget 2002 in their January
26, 2002 edition, carried the comments, expectations and suggestions of
leading businesspersons, the majority of whom described 2001 as a
difficult year. Against a backdrop of international economic downturn
after the events of September 11, 2001 in the United States, the Private
Sector holds the general view that the Government urgently needs to
provide a stimulus package to avoid an economic crisis in Guyana, increase
the income tax threshold and provide relief to the rice sector. Many
leaders of the private sector complain that the Government has ignored
suggestions put forward by them in the past and expressed the hope that
the 2002 consultations would be more meaningful. Reflecting their
continuing disappointment that sufficient notice is not given to their
recommendations, two major organisations - The Private Sector Commission
and the Trades Union Congress – revealed that their 2002 budget
submissions were indeed a resubmission their 2001 proposals.
Peter DeGroot, Vice-President of the Private Sector Commission, emphasised
that the PSC considered that Guyana urgently needs a stimulus package and
that the tax base must be broadened to ease the tax burden. Mr. DeGroot
believes that the non-taxable income tax threshold should be increased and
that the Government needs to provide immediate relief to the rice industry
as a whole instead of separately dealing with small and large farmers.
Eddie Boyer, Managing Director of National Hardware Guyana Ltd. and
President of the Georgetown Chamber of Commerce and Industry (GCCI), felt
that a stimulus package and foreign direct investment are vital to
Guyana’s development. He stated that the GCCI would like the abolition
of the 2% Minimum Corporation Tax, an increase in the income tax
threshold, a review of the tax system, reorganisation of the Customs
Department, reduced rates of Corporation and Property taxes and mortgage
relief to first time homeowners.
CEO of Farfan and Mendes – Ms. June Mendes – feels that there should
be an increase in the non-taxable income threshold and that a review of
customs duties and consumption taxes needs to be done. She would also like
to see the corporation tax rate of 35% apply to all corporate taxpayers.
Yesu Persaud, Chairman of the DDL conglomerate, believes that the
Government needs to stimulate the economy to encourage investments, create
jobs and increase consumer spending which will in turn provide tax
revenue. He was hopeful
that the consultative process would become more meaningful with the
formation of the Business Advisory Group to the President.
David Yankana, Executive Director of the Consultative Association of
Guyanese Industry and Director of the Private Sector Commission, believes
that the consultative process with the private sector needs to be “dealt
with in a more respectable way”. He feels that the Government should
provide incentives for agro-processing and create tax-free zones in New
Amsterdam, Corriverton and Linden. He also stated that the tax system
needs to be reviewed and thinks the Government should implement the system
of Value Added Tax urgently, and increase the non-taxable income
of the Guyana Manufacturers’ Association, Mr. Norman McLean, noted that
there “is a need for a stimulus package to get the economy going both on
the production and consumption sides”. He opined that there has to be an
increase in the non-taxable income threshold, a revision of consumption
tax and customs duties and the enhancement of customs enforcement.
Beni Sankar, rice miller and Chairman of the Rice Crisis Committee (RCC),
felt strongly that a return to growth of the economy required the
introduction of a stimulus package with a specific component for the
troubled rice industry.
of the Private Sector Commission, Mr. Brian James, expressed the hope that
the 2002 Budget consultation process would be meaningful and recommended
an increase in the income tax threshold, tax relief for first-time home
owners, the widening of the tax net, the removal of the 2% turnover tax
and property tax, the securing of investment and special help for the rice
sector including a flat tax of 10% on diesel.
In the Guyana Business
Outlook 2002 Report, an annual publication by Ram and McRae, companies
responding to the survey were asked to select from a list of eighteen
measures the five they would most like to see the Government take action
on. The top five issues identified were lowering of direct taxation,
reducing interest rates, controlling inflation, implementing a long-term
plan to assist manufacturers and taking steps to lower exchange rates.
a letter to the editor in the Stabroek News on February 22, 2002, Mr. Joey
Jagan predicted that “the Budget will be a rehash of the same old story
where excuses and blame on factors not related to Government performance
will be peddled”.
the letter columns of the State controlled Guyana Chronicle, a leading
Government supporter referred to “excitement being engendered by the
budget” and expressed the hope that “our competent Finance Minister
will give us added reasons for encouragement”. And on the eve of the
budget presentation, the Leader of the Peoples” National Congress –
Reform was reported as predicting that the country might be heading for
years of low or no growth, Guyanese were hoping for strong action from
their Finance Minister.