BUDGET 2021: VAT removed from construction materials

In recognising the importance of the construction to Guyana’s economic development, the People’s Progressive Party/Civic (PPP/C) government has removed Value Added Tax (VAT) on all construction materials.

In presenting Budget 2021 to the National Assembly on Friday, Finance Minister, Dr Ashni Singh revealed that VAT has been removed from the following items:

1. a) Stone imported for construction and housing from CARICOM – the government had previously zero-rated this to June 2021, and are now extending the zero-rated status until further notice.
2. b) Locally produced pre-stressed concrete piles.
3. c) Locally fabricated mild steel beams for building construction.
4. d) Locally manufactured roofing and PVC products for building construction.

“Mr. Speaker, we will also continue to monitor the cost of basic construction materials, such as cement and steel, and examine the possibility of applying relevant taxes in such a manner as to serve as an adjustor to cushion the impact of steep price escalation,” Dr Singh told the House.

The government has also reduced duty on Industrial Grade Cement from 15 per cent to five per cent.

Increase in the Low-Income Mortgage Loan Ceiling

Last year the government announced an increase from $8 million to $10 million in the ceiling on low income housing loans that may be obtained through commercial banks under the low income housing loans programme supported by government.

This year, there is a further increase from $10 million to $12 million, which will make housing loans more affordable to borrowers within that range.

“We will also, in due course examine the appropriateness of extending the programme to include other financial institutions such as insurance companies.”

Increase in the Ceiling for Housing Loans at the New Building Society

Dr Singh noted that currently, the ceiling on loans that the NBS can grant is $12 million and so the government is proposing an increase in the ceiling to $15 million. This will also enable borrowers desirous of borrowing within that range to access financing from the NBS.