The 2019 budget measures build on the success to date by targeting production, incomes and exports., according to Finance Minister, Winston Jordan.
“At the same time, they support the strengthening of some weak areas, including the closing of loopholes; and the simplification of business processes,” he noted.
Here is a list of measures in Budget 2019:
Measures in Support of Our Green Agenda-
- Change the Wear and Tear Schedule of the Income Tax Act to allow for the write off of capital expense within two years; and
- Waive import duties and VAT on new equipment.
- Amendment to the Customs Act to include relief from Customs duty for cars with a capacity equivalent to 2000 cc in Watts
- Amendment to the First Schedule to the Customs Act and Schedule 2 of the VAT Act to exempt change-over kits
- Waive the Excise Tax on all-electric motorcycles.
Measures to Increase Workers’ Income-
- Increase the income tax threshold to $780,000 or one-third, whichever is greater, with effect from year of income 2019.
Exemptions for Public Officers/Public Officials-
- Vehicles less than 4 years old currently pay zero percent, up to 1,499 cc, and 10 percent, up to 2,000 cc. However, qualifying public officials pay 10 percent and 30 percent, respectively for these two categories of vehicles. This is more than the rate specified in law for regular imports without exemption. Proposal to amend the Excise Tax Regulations to remove this anomaly and ensure consistency with the applicable law.
- Introduction of a 46 page, machine readable passport for business persons and other frequent travellers would find this new passport both attractive and convenient. It is priced at $10,000. The 32 page passport remains available at the current price of $6,000.
Exemptions for Remigrants-
- A system of credits up to a limit of $5 million for vehicles imported by a remigrant.
- The removal of the 6 month overseas ownership. This allows the remigrant the option of purchasing the vehicle locally, within six months of his/her arrival.
- Returning students who have completed at least 3 years of continuous study be eligible for remigrant status.
Measures in Support of the Elderly and those in Difficult Circumstances-
- Increase the Old Age Pension from$19,500 to $20,500.
- Increase Public Assistance from $8,000 to $9,000.
Measures in Support of Persons Living with Disabilities-
- Exempt from Excise Duty and VAT, vehicles for use by persons with disabilities or vehicles that will be converted for their use.
- Government will examine the feasibility of granting a tax rebate on handsets with accessibility features for persons living with disabilities. This will allow Guyanese who are visually- and hearing-impaired to afford a smartphone.
Measures in Support of the Private Sector-
- Final Tax – Gold and Diamond Miners Withholding Tax: Proposal to amend the law to treat as a final tax, the tax assessed on income derived from gold mining activities.
- Small Businesses: Proposal to reduce the income and corporate tax rates to 25 percent on taxable profits. To benefit from this reduction, the business must be registered with the Small Business Bureau, and be involved in either manufacturing or construction activities. This measure will cost $120 million.
- Non-Commercial Companies: Proposal to further reduce the manufacturing and non-commercial rate to 25 percent, with effect from Year of Income January 1, 2019.
- Property Tax – Individual and Companies:
- Proposal to increase the threshold for filing a return for: individuals, from the current net property of $1.5 million to $40 million; and for companies, from $0.5 million to $40 million.
- A reduction in the current rate for both individuals and companies, from 0.75 percent to 0.5 percent for the first $20 million in taxable net property, and the remainder being taxed at 0.75 percent.
- Capital Gains Tax: Proposal to exempt from the payment of Capital Gains Tax the proceeds from the sale of a house which is reinvested in another home of equal or greater value, during the said year of assessment or within 60 days of the end of the year in which the property is sold.
- Proposal to increase the threshold for Capital Gains Tax arising from disposal of property from $1,000 to $500,000.
- In light of the wear and tear allowance given to buildings used for service and warehousing, and property tax valuations being updated to the 01/01/2011 market value, proposal to remove the twenty-five year limitation. This means that Capital Gains Tax will be applicable on the gains accrued between the 2011 valuation or the date of acquisition, if later, and the selling price of the property when assets are disposed of, regardless of the date of acquisition.
- Wear and Tear Allowance for Service and Warehouse Buildings: Proposal to amend Section 17 of the Income Tax Act to provide for an allowance for wear and tear on any building used for services and warehousing purposes.
- Proposal to amend Part II of the Income Tax in Aid of Industry Act to allow for an initial allowance on buildings used for services and warehousing purposes.
- Export Allowance: Extend the export allowance to exporters of non-traditional products who are paid in a recognized tradable currency.
- Exemption from Customs Duty, Excise Tax and VAT:
- Reduction of the Excise Tax charged on Shandy and other beverages containing less than 1 percent alcohol by volume, from $126 per litre to $65 per litre.
- Reduction in the Excise Tax charged on indigenous wines and other fermented beverages that are manufactured using 100 percent local inputs, from $150 per litre to $65 per litre.
- New regime for taxing tobacco consisting of a combination of ad valorem and specific taxes as follows: the imposition of a specific Excise Tax of $2,500 per 1,000 sticks, together with Customs Duty of 100 percent and VAT of 14 percent.
- Exemption of pesticides used in the agriculture sector from Custom Duty and VAT.
- Exemption of limestone used in the agriculture sector from Customs Duty.
- Exemption from VAT, aircraft engines and main components/parts.
- Exemption from VAT, concrete blocks used for housing and construction.
- Exemption from VAT, equipment and chemicals for water treatment and production plants.
- Exemption from VAT, orthopedic appliances and artificial parts of the body.
- Exemption from VAT, Educational Robot Kits, in order to boost the ―Reading & Robotics‖ programme targeted to children in communities all across Guyana; to encourage more young people to become avid readers; and to develop necessary soft skills like communication, collaboration and conflict resolution.
- Exemption from VAT, boats used in rural and riverain areas designed for the transport of goods and persons not exceeding 7.08 cubic metres (250 cubic feet). The import Duty of 5% will also be waived.
- VAT Credits for Electricity and Water: Amendment to the Income Tax Act to give exporters a tax credit equivalent to the applicable VAT paid in relation to water and electricity.
- Remission of VAT: Proposal to amend the VAT Act to provide for the Minister of Finance to make regulation to remit, in whole or in part, the VAT and the interest on VAT payable by any person, where good cause is shown.
- Add Region ten to the regions granted reduced rates of Excise Tax on overland transportation imported for tourism purposes.
- Introduction of a tax credit, equal to 75 percent of income and corporate taxes payable on profits from tourism activities, for persons investing in Regions 1, 7, 8, 9 and 10.
- Exempt from the payment of import duties and excise taxes, motor buses with twelve (12) or more seats, not exceeding four years old, purchased and used exclusively for the transportation of tourists anywhere in Guyana, and registered and licensed as a tourism operator by the Guyana Tourism Authority (GTA).
- Hotels in some Regions will benefit from the proposed amendments to the Income Tax Act and the Income Tax (In Aid of Industry) Act that will allow the grant of wear and tear and initial allowances on hotel buildings.
- Refunds of Revenue –
Proposal for the Customs Act and the Income Tax Act to be amended to allow for the payment of customs duty and income tax refunds to be done out of the Customs Duty revenue and the Income Tax revenue, respectively.
- Proposal to amend the Motor Vehicle and Road Traffic Act to increase the duration of a driver‘s licence from 3 years to 5 years, and a small increase in the fee from $4,000 to $5,000.
- Proposal to amend Section 60A of the Income Tax Act to reduce the cost of reprint/replacement of a TIN certificate from $5,000 to $2,000. The cost for a TIN certificate for a first-time applicant would remain at $1,000.
- Proposal to amend the relevant section of the Income Tax Act to bring greater clarity to the definition of ―contractor‖, for the purpose of deducting the 2 percent withholding tax.
- Proposal to amend the First Schedule of the Tax Act to include the profession of Tax Preparer, to allow for a tax practice certificate to be issued to persons who, in the opinion of the Commissioner-General, are so qualified to offer accounting and tax services to taxpayers.
- Proposal to amend the Income Tax Act to remove the requirement for the Commissioner-General to send Notices of Assessment to taxpayers whose liability is less than $1,000.