The business community has described the 2017 budget as one not favourable for businesses and threatens inflation which means higher prices trickling down to consumers in sectors including health and education.
During a press conference on Thursday afternoon, the representative of the Business community said the budget will do very little for the local economy to recover from the past two years of sluggish performance.
It was noted that several items which were exempted from VAT are now removed from the list of zero-rated items.
“The budget gave and it taketh away a lot…It took away more than it actually gave in our summary”. This was the view of Ramesh Persaud, Chair of the economics committee within the PSC.
“The budget confirms our expectation that the economy is sluggish and is not growing as fast as it could. The acceptance of the Minister in his budget speech that so many sectors would have declined is what the private sector has been saying any months ago” he added.
As such the PSC is calling on the government to reconsider its policy.
PSC Chairman Edward Boyer said the body is calling on the government to give clarity to the budget presented by the Finance Minister. He said it’s a complicated budget and it is not simplified.
The group of concerned business representatives is hoping to engage government before the budget is debated with the hope that certain proposals will be changed.
Below is a list of the negatives and positives as outlined by the PSC.
|Measures||Impact on Business||Remarks|
|A. Measures in Support of Our Green Agenda and Protecting the Environment|
|(i) Tax exemptions on the importation of items for wind and solar energy investments. In addition, a one-off tax holiday of 2 years for corporation tax for companies involved exclusively in such importation;||Positive for Business||Applicable only to specialized businesses in the sector|
|(ii) Tax exemptions for investment in, and construction of, water treatment and water recycling facilities. In addition, a one-off tax holiday of 2 years for corporation tax for companies involved exclusively in such importation;||Positive for Business||Applicable only to specialized businesses in the sector|
|(iii) Tax exemptions for investment in, and construction of waste disposal facilities with particular reference to recycling facilities for plastic items. In addition, a one-off tax holiday of 2 years for corporation tax for companies involved exclusively in such importation;||Positive for Business||Applicable only to specialized businesses in the sector|
|(iv) Exemptions of customs duties and taxes on machinery and equipment to setup charging stations for electric vehicles;||Positive for Business||Applicable only to specialized businesses in the sector|
|(v) Exemptions of customs duties and taxes on greenhouses and component parts for use in the agricultural sector;||Positive for Business||Applicable only to specialized businesses in the sector|
|(vi) Lowering of excise tax on hybrid and electrical vehicles;||Positive for Business||Applicable only to specialized businesses in the sector|
|(vii) Zero-Rate of Excise tax on the following:||Applicable only to specialised businesses in the sector|
|a. Specially-designed Refuse (Garbage) Trucks;||Positive for Business||Applicable only to specialized businesses in the sector|
|b. Bio-fuel (bio-gas or bio-diesel);||Positive for Business||Applicable only to specialized businesses in the sector|
|(viii) Restriction on used tyres – The importation of used tyres for motor cars, vans, pickups, SUV’s, and mini-buses, will be restricted from entering Guyana, with effect from April 1, 2017. Vehicles described above, which are imported into Guyana after April 1, 2017, will be required to be fitted with new tyres (including the spare). A “phase out” period for existing stocks of used tyres will be allowed. Used tyres that have been ordered and shipped will be allowed a period of three months to have these orders completed;||Negative Impact on Business||This will impact public transportation cost and the small man.
However, it may improve safety on the roads.
|(ix) Reduction of duty on new tyres – The Customs duty on new tyres will be reduced from 30 percent to 15 percent; and||Positive for Business||Limited mitigation of the negative impact above.|
|(x) Imposition of an environmental levy of $10 per unit on the importers and local manufacturers of products using non-returnable metal, plastic or glass container of any alcoholic or non-alcoholic beverage. The new environmental levy with penalties will be implemented by amending the Customs Act, Chapter 82:01 to include a section to impose this levy, and will apply, across the board, on both imports and locally manufactured products, thus ensuring that Guyana complies with the provisions of Article 90 of the Revised Treaty of Chaguaramas.||Negative Impact on Consumers||This will negatively impact consumer disposable income.
The difference between the manufacturer and the importer must be clearly established. The manufacturer will be paying the cost plus maintenance of his EPA licence plus the $10. The importer will be paying $10 only. For one manufacturer that amounts to $600m peryear plus a possible total tax,@ $10, of $900m.
|B. Measures to Reduce Inequality and Increase Disposable Income|
|6.4 Mr. Speaker, I propose the following changes that are aimed at reducing inequality and tax avoidance, and increase disposable income:|
|(i) Increase in tax threshold – An increase in the current threshold of $660,000 per annum to the greater of $720,000 per annum or one-third (1/3) of the employee’s salary. An additional 7,600 persons will be taken off the tax register;||Positive impact on business||Marginal increase in disposable income.|
|(ii) The reduction in the Personal Income Tax rate from 30 percent to 28 percent for individuals earning less than $2,160,000 per annum or $180,000 per month.
At the same time, Mr. Speaker, I propose to introduce an element of progressiveness in the tax system. A new rate of 40 percent will be applied to the incomes of individuals earning in excess of $2,160,000 per annum.
|Positive impact on business
Negative impact on business
|Marginal increase in disposable income.
Marginal increase in disposable income. However removal of allowances and in kind benefits can result in less income for the middle class and significantly impact on the management and professional staff availability as this can result in further brain drain.
|These measures will allow for an annual increase in take home pay to persons earning under $720,000 of $18,000, and for persons earning $2,160,000 to benefit from an additional annual take home pay of $46,800. Further, in the case of the higher paid employees, by allowing for one-third of their income to be tax free, the incidence of tax will not exceed 25 percent, thereby allowing for a higher “take home” pay. This would reduce the need for tax free benefits, in kind, now being paid to employees in the private sector in lieu of salaries, and claimed by self-employed persons in lieu of income. The loss from the implementation of these tax measures is $3.9 billion, which can used to boost personal savings and consumerism;||Positive Impact on Business||Increase disposable income should help with aggregate demand but as mentioned above will have a negative impact on many persons.|
|(iii) Repeal of Section 33E (4) of the Income Tax Act as it relates to the sale of gold or diamond not being taken into account in ascertaining the chargeable income of the persons who owned gold or diamonds. This repeal seeks to bring these operators within the purview of all the Tax Acts;||Negative impact on Business||This will be burdensome to small miners and mining companies and not practical to implement. It can contribute to the industry going underground.|
|(iv) Increase in the Tributors Tax from 10 percent to 20 percent – The tax on tributors has remained unchanged, since its inception in 1998. This increase, which is in line with the withholding tax, is the first to removing distortions and multiplicity of tax rates;||Negative impact on Business||This will significantly reduce the disposable income of mine workers and miners. It is also not practical to implement. It can contribute to the industry going underground.|
|(v) The imposition of a 2 percent withholding tax on the gross payments made to all contractors. The two percent shall be deducted from every payment made to contractors by contractees and shall be remitted to the Guyana Revenue Authority. The amounts deducted would be allowed as a credit against the final taxes payable by the contractors; and||Negative impact on Business||This may be beneficial to small contractors but disadvantageous to contractors with incorporated companies who have to pay advance taxes also. Clarity needs to be provided on whether this will be applied to contracts with the government or all contractors including those on private contracts.|
|(vi) Restriction of Mortgage Interest Relief to loans up to $15 million. This measure will ensure that only low to middle income earners benefit, as was intended.||Negative impact on Business||This will negatively impact the middle class and reduce disposable income. Many professionals may be demotivated as a result.|
|All of these measures will take effect from January 1, 2017.|
|C. Measures to Spur Economic Growth|
|6.6 Mr. Speaker, for many years, the manufacturing sector has clamoured for a reduction in the corporate tax rate, in order to improve their competitiveness locally and overseas. Further, companies that conduct both commercial and non-commercial operations engage in income shifting in order to meet the 75 percent criteria, thereby allowing them to be taxed at the lower corporate tax rate applicable to manufacturing concerns. In relation to the 2 percent minimum tax on commercial operations, certaincompanies are at a disadvantage whereby their effective tax rate exceeds the commercial tax rate of 40 percent. I, therefore, propose the following:|
|(i) A reduction in the Corporation Tax rate, from 30 percent to 27.5 percent, for manufacturing and non-commercial companies;||Positive Impact on Business||This may contribute to a more stable inflation rate and increase international competivess of local manufacturers.|
|(ii) The introduction of a dual tax-rate for Companies carrying out both commercial and non-commercial activities. This means that the non-commercial part of the business will benefit from the lower corporate tax rate of 27.5 percent but will pay the commercial tax rate of 40 percent for their commercial operations. Companies must, therefore, engage in segment accounting and keep separate books of accounts to so benefit;||Negative Impact on Business||This will contribute to inflation on commercial goods as profits margin will need to be maintained.|
|(iii) These two measures will result in a loss of $752 million in taxes. However, we anticipate this amount being invested in renewal and expansion of businesses; and||We do not believe the loss will be this great as more taxes will be collected from companies providing noncommercial and commercial services. Tax reduction also widens the tax net.|
|(iv) The Minimum Tax Rate shall be 2 percent of the turnover of a commercial company, or 40 percent of taxable income, whichever is lower. This will alleviate the higher incidence of tax on those entities which continually have a higher incidence of tax greater than the present commercial rate of 40 percent.||Positive Impact on Business||Overall this will be a fairer system and companies making losses will no longer have a minimum tax. However, it does not deal with persons who may be deliberately under reporting their profits.|
|a. Tender Compliances for Government Contracts|
|6.7 Mr. Speaker, currently bidders for contracts are required to have valid Income Tax and NIS compliance certificates. This has especially hampered small contractors from participating in the procurement process. While these requirements will remain, we propose to make it easier for potential bidders to access these documents as follows:|
|b. Automatic Issuance of Temporary Income Tax and NIS Compliance Certificates||Positive Impact on Business||This will help small businesses but unsure on its impact in expanding the tax net.|
|6.8 Prospective bidders will be given a one-off, three month, temporary certificate, regardless of their status with GRA and NIS. During the three months, they are expected to make the necessary arrangements to become compliant. Each certificate will cost $1,000.||Positive Impact on Business||This will benefit non-compliant tax payers and is not fair to businesses who are compliant. There should be a limit of contract size that this could be applicable to. Clarity is needed whether this is only applicable to small businesses or all businesses.|
|c. Standard Income Tax and NIS Compliance Certificates||Positive Impact on Business||Will improve the ease of doing business with the government.|
|6.9 These will be valid for one year and will be issued to individuals and companies that are in good standing with these agencies.
Each certificate will cost $2,500.
|Positive Impact on Business.
Negative Impact on Business
|Will improve the ease of doing business with the government.|
|d. Trusted Trader Compliance Certificates||Positive Impact on Business||May contribute to improved business efficiency and lower cost of goods and services.|
|6.10 These will be valid for three years and will be issued to companies that have a demonstrated track record of compliance. Each certificate will cost $10,000.|
|6.11 These measures will take effect from January 1, 2017.|
|D. Value-Added Tax (VAT)|
|6.12 Mr. Speaker, in keeping with our promise made in our Manifesto, and based on recommendations of the Tax Reform Committee and the CARTAC study, I propose the following changes to the VAT regime:|
|(i) Reduction in the rate of VAT – I propose to reduce the Value Added Tax rate from 16 percent to 14 percent;||Positive Impact on Business||Increased disposable income to consumers will result in increase on demand.|
|(ii) Increase in the VAT threshold – I propose to increase the VAT threshold from $10 million to $15 million. It was found that a significant number of persons were unable to maintain proper records to meet the minimum threshold requirement for VAT registration. As such, this measure will allow the GRA to concentrate on the cohort that makes the bulk of VAT payments, since there will be a smaller tax base and consequently less VAT registrants to administer;||Positive Impact on Business||Beneficial to small businesses in particular.
|(iii) VAT on electricity consumption – I propose to introduce a VAT of 14 percent on electricity consumption in excess of $10,000 per month. For the avoidance of doubt, the $10,000 limit is not an allowance. While VAT will not be applied to consumption up to $10,000, it will be applied to the full amount once consumption exceeds $10,000;||Negative impact on business||This will have a significant impact on businesses providing exempt rather than zero rated service. Will contribute to inflation and reduced disposable income to consumers and significantly make life harder for the middle class.|
|(iv) VAT on water consumption – I propose to introduce a VAT of 14 percent on water consumption in excess of $1,500 per month. For the avoidance of doubt, the $1,500 limit is not an allowance. While VAT will not be applied to consumption up to $1,500, it will be applied to the full amount once consumption exceeds $1,500; and||Negative impact on business||This will have a significant impact on businesses providing exempt rather than zero rated service. Will contribute to inflation and reduced disposable income to consumers and significantly make life harder for the middle class.|
|(v) Exempt and Zero-rated items. I propose to expand the list of exempt items and eliminate all zero-rated items, with the exception of those pertaining to exports and manufacturing inputs. A full list of exempt and zero-rated items is included as an appendix to the budget speech.||Negative impact on business||Under the VAT Act supplies are classified in three categories:
1. Standard supplies – 16% (proposed 14%)
2. Zero Rated Supplies
3. Exempt Supplies
Only standard supplies and zero rated supplies are considered to be taxable supplies. Where taxable supplies are made input vat can be reclaimed. In such a case VAT is not a tax on business but the end user.
Under the new system where most zero rated items have become exempt input vat cannot be reclaimed. This will result in the increase in prices of many basic commodities.
The government should consider reversing this position as it would be a horrible impact on the poor.
Clarity needs to be provided on items removed from the zero rating list such as:
Internet Services Etc.
|E. Measures to Improve Tax Administration|
|6.13 The following amendments are proposed to assist the Guyana Revenue Authority to overcome the many challenges it faces in enforcing and administering the laws:f|
|(i) Excise Stamp System – In an effort to minimize the smuggling of high-dutiable excise products, GRA will implement, 2017, an “Excise Stamp Programme”, based on an Agreement with Canadian Bank Note (CBN). An excise stamp is a type of revenue stamp affixed to excisable goods to indicate that the required excise (and other) taxes have been paid on the product. This will see the stamping of alcohol and tobacco products with “high-security” stamps, which can be read by barcode scanners. The system is highly secure and will be supplemented by a track and trace system, anti-counterfeit measures, barcode scanners, and technical support. The Excise law will be amended suitably to facilitate the implementation of this measure;||Positive Impact on Business||This will reduce smuggling and counterfeiting. However some companies may find it difficult to implement and as such the Government should work with them to better understand their difficulties of implementation.|
|(ii) Increase in the three years’ statute of limitations – It is proposed to increase the statute of limitation from 3 years to 5 years. This will give the Revenue Authority time to cover a longer period to examine taxpayers’ records, consistent with similar provisions in the Income Tax Act. This will enhance enforcement and compliance efforts;||Negative impact on business.||This will significantly increase the record keeping burden of small businesses. Businesses should not be penalized as a result of the inefficiencies of GRA to do timely audits.|
|(iii) Persons leaving Guyana with tax liabilities – It is proposed to revise the provision of Section 45 of the VAT Act by deleting the proviso which allows for a court order to be obtained to enforce this provision. This will be consistent with a similar provision which exists under section 71 of the Income Tax Act Chapter 81:01;||Negative impact on business.||This goes against our rights of freedom of movement as per the constitution. The GRA should not be allowed to do the Job of the Judiciary.|
|(iv) Extension of time for payment of tax – Section 42 of the VAT Act empowers the Commissioner to extend the time for payment of tax by the person beyond the date on which it is due and payable under this section, or make such other arrangements as appropriate to ensure the payment of the tax due. This provision allows a taxpayer to object to a decision by the Commissioner regarding an arrangement to settle outstanding VAT due. Given that VAT is funds held in trust, no such right should be given to taxpayers regarding payment. Therefore, this provision will be repealed;||Negative impact on business.||We agree that VAT is held in trust, but removing the discretion of good faith due to mitigating circumstances goes against the principles of natural justice. Persons should be given an opportunity of a hearing before a decision is made in certain circumstances.|
|(v) Non-Resident VAT refunds – Non-residents are required to pay VAT and apply for a refund when they are leaving the country. This places a heavy administrative burden on GRA. In any case, not many persons benefit. As such, this provision will be repealed;||Negative impact on business.||Will affect tourism products. Rather than eliminating the system, thoughts should have gone into marketing and simplifying the benefits to tourists and non-residents.|
|(vi) Budget Agencies to pay VAT – Paragraph 2 (x) will be removed from the Schedule I of the VAT Act which says, “goods when imported and works and consultancy services purchased by a budget agency named in the schedule to the Fiscal Management and Accountability Act 2003.” This will result in Budget Agencies paying VAT on all goods and services, except those financed from the proceeds of a donor agency;||Neutral impact on business.||This is tantamount to cutting the budgets of various agencies. This will really have a neutral affect as one part of Government expenditure is increased and income increased.|
|(vii) Removal of locally produced items in the VAT Act – A review of the VAT Act confirmed that in 2007, a few zero-rated items had the words “locally produced”. Schedule 1, paragraph 2 of the VAT Act will be amended accordingly;||Negative impact on business.||This will ensure compliance to trade rules but will open local manufacturers to competition from dumped products and those coming from countries with subsidies.|
|(viii) Late filing of Income Tax, Corporation tax and Property Tax Returns – The current late filing penalty regime does not provide for penalties to be imposed on late returns which disclose a loss. Taxpayers can submit a loss or deficit return late without fear of any penalties, since penalties are applied to taxes assessed. I propose to increase late filing penalties to 10 percent (similar to VAT). A flat fee of $50,000 will be applied to each loss/deficit return submitted after the prescribed time;||Negative impact on business.||This will make it harder for small business, farmers, minersetc to come into the formal system.|
|(ix) Late payment of tax – The penalty for late payment of tax provided for under section 99 (1) of the Income Tax Act Chapter 81:01 will be repealed and a simplified interest regime enacted. Section 6 (1) (c) of the Financial Administration and Audit Act will be amended to facilitate the imposition of interest on late payment of tax at the rate of 2 percent per annum (similar to VAT);||Negative impact on business.||Rather than implementing a punitive system, a system of reward, such as tax refunds for filing and paying earlier may be more effective. Many people in the USA file returns early not because of fear of penalty but because of the tax refunds they can claim.|
|(x) Interest Rate – The relevant section would be amended to provide for a simple interest rate of 18 percent per annum, instead of the current Bank of Guyana market published rates;||Negative impact on business.||This is significantly higher than the prime rate of 11%. Same should be applicable if GRA delays refunds.|
|(xi) Failure to keep proper books and records – The penalties for failing to keep proper books and records are lenient. As a result, many taxpayers, particularly the self-employed taxpayers, fail to keep proper books and records. The penalties will be increased to $200,000 or five percent of the tax assessed, whichever is greater;||Negative impact on business.||This will force many small business to stay informal and cause many more to go underground. This is also difficult to enforce and impractical to implement. It will not contribute to the widening of the tax net. Those that are compliant and submit returns will be further penalized.|
|(xii) Failure to present books and records when requested – Taxpayers fail to present books, records and other information in a timely manner. Audits are greatly affected by the lack of evidence to justify disclosures in financial statements. It is proposed to increase the fine to $200,000 and/or six months imprisonment;||Negative impact on business.||Same as above.|
|(xiii) Distress Proceedings for non-payment of tax – In an effort to streamline the various tax Acts under the administration of the GRA, legislation currently in place in the VAT Act as regards distress proceedings will be inserted in the Income Tax Act to facilitate like action in cases of non-compliance and non-payment of Income Tax. This legislation will help to strengthen GRA’s collections and improve compliance by taxpayers;||Negative impact on business.||Will impact non- compliant tax payers and be a Signiant burden to small businesses and the self-employed.|
|(xiv) Garnishment – The provisions of section 102 of the Income Tax Act Chapter 81:01 will be revised to provide authority to the GRA to garnish funds from bank accounts held by taxpayers who have outstanding tax arrears. This provision would assist to improve compliance with demands issued by the GRA for outstanding payments;||Negative impact on business.||This is dangerous if a court order is not obtained. Again, the GRA should not ne empowered to do the work of the Judiciary. The Minister needs to clarify why is GRA dodging the Judiciary? Do they not have confidence in this constitutional mechanism?
|(xv) Increase penalties for offences – The penalty imposed for offenses committed against the Income Tax Act under the provisions of Section 109 to 111 would be increased from $15,000 to $100,000 to force voluntary compliance;||Negative impact on business.||This will force many small business to stay informal and cause many more to go underground. This is also difficult to enforce and impractical to implement. It will not contribute to the widening of the tax net. Those that are compliant and submit returns will be further penalized.|
|(xvi) Non-resident companies failing to keep accounting records in Guyana – Non-resident companies, which fail to keep relevant books and records in Guyana, thereby causing unnecessary delays during audit, will be subject to a fine of $1,000,000;||Negative impact on business.||This will create a negative image of the country and reduce foreign direct investment.|
|(xvii) Failure to inform the GRA about the commencement of business (Registration) – Many persons commence business but do not inform the GRA about this activity. Many businesses are non-compliant with the law regarding filing of returns, especially at the early stages. The law will be amended to give persons a maximum of three months from the commencement date of business to inform the GRA; and||Negative impact on business.||This will force many small business to stay informal and cause many more to go underground.|
|(xviii) Cost for TIN – There is currently no fees for the issuance of TIN certificates, even though GRA incurs an administrative cost. It is proposed to impose a fee of $1,000 for the first TIN certificate and $5,000 for reprinting of TIN certificates.||Negative impact on business.||This is not very wise. No barrier of entry should be in place for someone to come under the tax net.|
|F. Measures to Enhance Revenue|
|6.14 Mr. Speaker, the following changes are proposed:|
|(i) Travel Tax – The departure tax payable by persons leaving Guyana has remained unchanged for years. As a result, it is amongst the lowest in the world. I, therefore, propose to increase the travel tax from $2,500 to $3,500.
(ii) I wish to announce, too, that measures will be implemented to enable airlines to collect and remit the tax to the Revenue Authority, thereby making for one less departure line at our airports, and reducing the cost and administrative burden on the GRA while ensuring consistency with international practices in the travel industry;
|Negative Impact on Business
Positive Impact on business
|This may be fair if inflation is applied but will reduce disposable income of tourist. However, increase in departures out of Guyana may have offset the inflation impact.
This is a welcomed initiative.
|(ii) Premium Tax on Re-insurance Premiums for Local Aircraft Operators – Based on representations made by the Aircraft Association, this Government has acceded to their request to waive premium taxes charged on insurance premiums payable by aircraft owners and accumulated for the past eight years exceeding. The loss is $80 million, but we believe it will stimulate growth and improve flights to interior locations. It is proposed that the tax will be now payable from January 1, 2017;||Negative Impact on Business||This will increase the cost of hinterland travel and reduce disposable income of tourist. It also reduces investor confidence in the sector as there are no certainty of policy when an investment is made.|
|(iii) Capital Gains Tax – In moving the property tax valuation to 1/1/2011 as per the Property Tax Act in 2014, the Capital Gains Tax Act was inadvertently left unchanged, thereby allowing for taxation not in keeping with the taxation principles on the calculation of Capital Gains. I believe that this inadvertence has created an unfair burden on persons selling properties that were re-valued. Consequently, I propose a change in the relevant sections of the Capital Gains Tax Act to bring them in line with the Property Tax valuations;||Positive Impact on Business||Valuations should be indexed based and updated annually.|
|(iv) Fee for Passport – It is proposed to increase the fee for a passport from $4,000 to $6,000. However, persons 65 years and above will be exempt from the payment of the passport fee. This measure takes effect from January 1, 2017;||Negative Impact on Business||This may be fair if inflation is applied but will reduce disposable income.|
|(v) Abolishment of Certificate of Compliance to process Transfer of Motor Vehicle Registration – It is proposed to dispense with the requirement for Motor Vehicle Compliance, since this will reduce the duplication of documents submitted to GRA and the processing time for the completion of transfer of registration. At the same time, it is proposed to increase fees for transfer of motor vehicle registration for motor cycle and other vehicles, ranging from $5,000 for motor cycles to $25,000 or 2% of sale price, whichever is higher;||Positive Impact on Business||This will enhance efficiency and speed by which ownership can be changed. The cost of obtaining compliance will be eliminated.|
|(vi) Fees for permits & other documents – I propose to impose a fee of $2,000 for a Driving Permit issued to drivers residing abroad but visiting the country temporarily, and $2,000 for persons requiring a Letter of Authenticity for verification of drivers’ licences;||Negative Impact on Business||This is a cost recovery initiative but will impact on tourist cost.|
|(vii) Miscellaneous fees – Many customs fees are over 20 years old and cannot cover the administrative and other costs attached to performing the service. I propose to amend Section 275 of the Customs Act, Chapter 82:01 to bring these fees in line with current reality. A list of the services provided and the proposed fee increase is at Appendix;||Negative Impact on Business||This will contribute to inflation and increase in cost many goods coming into the country. This is estimated to increase the cost of clearing a container by $20,000.|
|(viii) Intoxicating Liquor Licensing Act & Tax Act, Chapter 82:21 – I propose an increase in fees for Application and Renewal of Intoxicating Liquor Licences. These fees were in existence since 1992; and||Negative Impact on Business||This will contribute to inflation and higher cost of doing this business.
This will directly impact the poor as it will not stop persons from consuming alcohol but they will have less money for food and their family.
Will only affect delinquent.
|Table 3: Current and Proposed Fees for Liquor Licences|
|Intoxication liquor licensing Act Chapter 82:21|
|Increase the fee for Application and Renewal of Licences for Hotel Restaurant, Members Club, Spirit Shop and Off Licences.||Negative Impact on Business|
|(ix) Increase in penalties – I propose to amend the legislation to increase the penalties relating to Licences for Spirituous Liquor. The relevant sections to be amended and the new penalties to be applied are detailed in the Appendix to the budget speech.||Negative Impact on Business|
|G. Measures in Support of the Elderly|
|6.15 Mr. Speaker, in addition to benefits granted to the elderly in the previous two budgets, and the removal of the passport fee in this budget, I am pleased to announce an increase in Old Age Pension to $19,000. Since coming to office a mere 18 months ago, the Government has increased this assistance to our elderly citizens by 45 percent. Over 53,000 persons are expected to benefit. At the same time, Public Assistance will increase to $7,500. Both increases are to take effect from January 1, 2017.||Positive Impact on Business||Increase may not be sufficient to offset the cost increase due to some of the other initiatives mentioned above.|
|H. Measures to Improve Workers’ Disposable Income|
|6.16 Mr. Speaker, in addition to the substantial increase paid to public servants over the last 18 months, the Government has used other means to increase workers’ disposable income, including raising the income tax threshold by at least 20 percent, removing the income tax on the workers contribution to NIS and paying a one-off bonus. The Government will continue to engage the Unions in negotiations to find common ground to issues pertaining to wage and salary adjustment, de-bunching and allowances, taking into consideration the state of the economy and our desire to maintain macroeconomic stability.||Positive Impact on Business||Increase may not be sufficient to offset the cost increase due to some of the other initiatives mentioned above.|