BUDGET 2018: Private employees to get tax-free vacation allowance
Minister of Finance, Winston Jordan has announced that employees in the private sector will be able to enjoy tax-free vacation allowances at the commencement of 2018.
Jordan, during the presentation of the 2018 budget, explained that currently, public sector employees enjoy a tax-free vacation allowance, regardless of whether they spend their vacation in Guyana or abroad.
On the other hand, he noted that private sector employees are only given the allowance to the extent of the cost of the passage to travel abroad.
“I propose to remove this anomaly, thereby allowing private sector employees to enjoy the vacation allowance tax-free and to use it as they see fit,” he stated.
Jordan explained that as in the case of public sector employees, a tax-free vacation allowance to a private sector employee will be allowed up to a maximum of one month of the employee’s base salary.
He said the Guyana Revenue Authority (GRA) will scrutinize these allowances closely to ensure that the previous abuse of this benefit-in-kind, where employees were being paid huge vacation allowances, in lieu of salaries, does not recur. This measure takes effect on January 1, 2018.