In its push to improve business competitiveness, promote local content and support job creation, the government has announced tax reductions as part of its implementing measures in the 2022 national budget.
In relation to the importation of new motor trucks of any tonnage for transport of goods (referring to vehicles less than four years old), the government intends to remove the 10 percent excise tax as well as the 14 percent VAT that currently apply.
In relation to the importation of new haulers for pulling containers or similar vehicles for pulling, Finance Minister Dr. Ashni Singh also announced the removal of the VAT of 14 percent that currently applies.
New double-cab pickups below 2000 cc we will see the removal of the currently applicable 10 percent excise tax altogether, while for new double-cab pickups between 2000 and 3000 cc there will be a reduction of the excise tax from 110 percent to 75 percent.
In relation to the importation of new single cab pickups below 3000 cc, the government will remove the currently applicable 10 percent excise tax altogether while reducing the cost of cranes, safety equipment, and oil spill equipment
“Still on the subject of improving the competitiveness of Guyanese businesses and enabling them to ramp up their equipment fleet, we will also remove the 14 percent VAT on cranes, safety equipment, and oil spill response equipment, all as part of ensuring that as many Guyanese businesses as possible can equip themselves accordingly,” Dr. Singh said as he presented the 2022 budget.
The government had given a commitment to reverse the punitive taxes that were implemented by the APNU/AFC with one such tax being the 2 percent withholding tax on resident contractors.
“This tax very severely affected the liquidity of resident contractors and therefore also undermined their competitiveness. It also proved challenging to administer, with very uneven compliance, particularly outside the Central Government.
“We will, therefore, remove this 2 percent withholding tax on resident contractors,” Dr. Singh announced.
Together these measures will cost an estimated $2 billion and will make an important difference in ensuring the competitiveness of Guyanese businesses, and thereby help create jobs for the Guyanese People, the Minister explained.
Looking at the Local Content Act, Dr. Singh said in the interest of ensuring that Guyanese businesses can compete successfully under the new local content framework, the government will take steps wherever practicable to minimise disparities arising from the tax system that will disadvantage Guyanese businesses against their international counterparts.
This will help improve the competitiveness of Guyanese companies, help secure business opportunities for them, and thereby create jobs for Guyanese nationals.