Selling lands, collecting $14B in outstanding taxes could meet sugar severance – Jordan

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By Neil Marks

The Government is hoping that collection of outstanding taxes and selling of lands could meet severance payments to sugar workers and avoid the Government having to dip into programmes already budgeted for.

“Let me reiterate there will be no new taxes to finance this, but we are looking at enhanced revenue collection in a number of areas,” Winston Jordan, Minister of Finance, told the News Room Wednesday, 24 January 2018.

He referred to recent statements by Godfrey Statia, Commissioner General of the Guyana Revenue Authority (GRA), that $14 billion in revenues are outstanding from various sources and if collected could solve the headache of finding the money to meet the severance payment.

“If we can collect just 10%, or even 20% of it beyond what we are slated to collect, then that would at least meet more than 50% of the severance,” Jordan reasoned.

On January 10, 2018, President David Granger suggested that the total severance would cost $4 billion, with $2 billion required by the end of this month and the additional amount by the end of the year. The National Assembly on Friday, January 19, 2018, approved the first half of the payment, clearing $1.9 billion.

Over 4, 700 workers must be paid severance from the four estates which have been closed. Most of the workers were sent home on December 29, 2017; over 900 will be sent home by the first quarter this year, Jordan stated.

To find the funds to cover all the severance pay, President Granger had indicated that some programmes from various sectors will have to be shaved off to meet the payment.

“The Cabinet decision was that all Ministers would look at areas where we can give up or delay programmes to provide for this severance,” Jordan confirmed, adding that this review process is underway.

However, he said that the “enhanced” revenue collection could avoid any programmes from being cut.

Further, he said the faster lands that belong to the Guyana Sugar Corporation (GuySuCo) can be sold would be better, as this could also be a possible source of funding to cover the severance payment.

The assets, moveable and immovable, of the four estates which have been closed – Skeldon and Rose Hall in Berbice, Enmore on the East Coast of Demerara and Wales, West Bank Demerara – have been handed over to the Government’s asset-bearing and investment arm NICIL, the National Industrial Commercial Investments Limited.

A Special Purpose Unit (SPU) under NICIL is managing the divestment of GuySuCo.

“The faster we can sell of land is the faster we can get two forms of financing,” Jordon stated. He suggested that some funds can go to severance while some funds could go to the three estates left in operation.

GuySuCo estimates that the three-estates producing 147, 000 of sugar by 2020 will help it to return to profitability.

The Government decided to close the four estates, saying that it could no longer keep pumping billions from the treasury into their operations annually. From 2015-2017, some $32 billion was pumped into the industry.

Opposition Leader Bharrat Jagdeo has said he will call for an investigation into how those funds were spent.

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