Amid global crises that resulted in significant prices increases locally, the government slashed or entirely removed numerous taxes allowing people to keep more of their money and President Dr. Irfaan Ali said each household was able to save about $180,000.
“… removing the 200 plus burdensome taxes measures has saved the people $31.4 billion.
“At the household level, this meant that roughly $180,000 per family was saved with the removal of these taxes,” the Head of State said on Thursday during his address at the Georgetown Chamber of Commerce and Industry (GCCI)’s 133rd Annual Awards Presentation and Gala Dinner, at the Marriott Hotel.
Since taking office in August 2020, the People’s Progressive Party Civic (PPP/C) government removed numerous taxes including Value Added Tax (VAT) from water and electricity.
Taxes in specific productive sectors like mining and agriculture were also removed as part of efforts to stimulate growth. The removal of taxes was in direct response to economic challenges experienced locally.
One major challenge that emerged was inflation, which, in simple terms, refers to the increase in the prices for goods and services.
With inflation, the same amount of money paid for goods and services at an earlier period will cover the cost of fewer of those goods and services.
And this challenge means that the average Guyanese would experience a rise in the cost of goods and services. The President, however, explained that the government has been working to cushion the impact.
Taxes are one way the government gets money to spend on projects and initiatives. Even as the government relinquished billions of dollars, the President said spending on much-needed transformational projects has increased.
In fact, he said the country’s spending on big, transformational projects (capital expenditure) has more than doubled.
Simultaneously, the government was able to limit the amount of routine spending needed to sustain those projects (this is known as current expenditures and includes the payments of salaries, for example).
“You cannot point to another economy that has increased its capital expenditure by 108 per cent but its current expenditure by 11 per cent.
“It means the government was able to cut a lot of fat out of the budget and we were also able to concentrate on key areas,” he said.
President Ali also noted that the government’s ability to build in-country capacity meant that less money was spent on contracting consultancy services before projects can be conceptualised and executed.
It is important to note too that Guyana is benefitting from significant revenues from its nascent oil and gas sector. With this, the government has been focused on executing more large-scale projects with oil revenues.