$781.9B budget passed without changes
After four days of consideration of estimates in the Parliamentary Committee of Supply, the $781.9 billion 2023 budget, presented by Finance Minister Dr. Ashni Singh on January 16, was approved in totality on Thursday.
That approval made way for the National Assembly to pass the budget, which in actuality, totalled $721.5 billion. The passage of the budget came with support from the parliamentary opposition parties.
Some $60.6 billion is chargeable by law directly to the Consolidated Fund.
This also paves the way for $208 billion of oil funds to be withdrawn from the Natural Resource Fund this year. This is the second year the national budget is being partly financed by oil funds.
The Finance Minister, in brief remarks, thanked his colleagues on the Opposition benches for participating fully in the process.
“It gave us a good opportunity to elaborate and elucidate further.
“We appreciate the questions presented and it allowed the people of Guyana to take a deeper dive into the estimates,” Dr. Singh said.
His comments were supported with remarks from Speaker of the National Assembly, Manzoor Nadir, who said he was also happy to see Members of Parliament using all the budget volumes in consideration of the estimates.
The government has maintained that the fiscal plan focuses on meeting the current and future needs of Guyana as was presented under the theme: “Improving Lives Today, Building Prosperity Tomorrow”.
This budget is some 41.4 per cent larger than $552.9 billion budget that was passed without changes in the National Assembly last year.
The government plans to finance this budget without implementing any new taxes.
The government, through this budget, will remove the 14 per cent Value Added Tax (VAT) on new electric motor vehicles- that is, vehicles less than four years old. He also said that VAT on the sale of residential properties will be removed.
The government also plans to lower import duties on motor vehicles. The duty of new motor vehicles below 1500cc will be reduced from 45 per cent to 35 per cent. This is expected to reduce the cost of importing vehicles by about $200,000.
Meanwhile, for used imported vehicles below 1500cc, the government will replace the current tax rate with a flat rate of taxes of $800,000. This is expected to reduce the cost of importing such vehicles by $300,000.
As part of a raft of relief measures meant to support people, Budget 2023 also saw increases in the old age pension, public assistance and the schoolchildren’s cash grant.
The old-age pension is being increased from $28,000 to $33,000, placing an additional $4.4 billion of disposable income in the hands of 73,000 pensioners.
Public assistance will also be increased from $14,000 monthly to $16,000, benefitting over 29,000 persons, and placing an additional $700 million of disposable income to these individuals.
And the ‘Because We Care’ cash grant for every school child will see an increase from $25,000 to $35,000. This will benefit over 214,000 schoolchildren in public and private schools and will place an additional $2.1 billion in the hands of their parents.
The income tax threshold will also move to $85,000, allowing thousands of workers to pay fewer taxes and take home more money each month.
This move will mean that over 12,000 people will no longer pay income taxes; those are people who earn 85,000 and less. What this also means is that individuals will only pay tax on the amounts earned after the first $85,000 is deducted.
Cognisant of global challenges that have contributed to the rising cost of living in Guyana, Dr. Singh pointed out that $5 billion will be set aside for measures to cushion that increase, as was done last year.
A sum of $10 billion will also be spent on the government’s part-time jobs initiative and the state will maintain the reduction of freight charges and excise tax on fuel.