The 26th edition of Ram & McRae’s annual budget review has been published and it welcomes the early presentation of the 2016 budget while also offering some criticism

In what appeared to be its greatest worry, the tax consulting body, expressed disappointment on the issue of Contract Employees.

The number of contract employees has been increasing steadily under the new government.

The report pointed out that in the budget, under the Ministry of the Presidency, there was an increase in contract employees from 298 to 505 is reported. “Given the revelation of ghost employees under the former administration, we expected a significant reduction,” the review noted.

“This makes a mockery of the idea of the Public Service Commission and approved appointments, the hallmarks of good human resource management in the public service. We sincerely believe that President Granger has the authority to end this abuse. We look to him to act on the matter,” it added.

Under “Who Gets What in 2016” section of the report,  Ram and McRae said it believes there is an omission in the Budget regarding the Fiscal Transfers Act and “this is key to the functioning of the Local Government system as it provides the finances to the newly elected bodies in the upcoming Local Government Elections.”

The 2016 budget focused heavily on reducing revenue leakages. To this end the review points out that much will depend on the Revenue Authority (GRA) returning to normalcy in a year when it is likely to be distracted by a Forensic Audit and for the first time in its existence will be without a substantive Commissioner General and deputy Commissioner General.

Ram & McRae noted that while the budget is the largest ever, it also reflects a massive deficit and but believes its projections were both ambitious and realizable.

“It is regrettable that the largest Budget ever, of which a huge chunk is for capital expenditure, will probably operate in the absence of the constitutionally mandated Public Procurement Commission for which only a nominal $1,000 is provided in the Budget,” the review points out.

It said also that while the Budget is large it is not particularly generous, pointing to substantial sums of remissions which have passed under the radar but which amount to approximately fifty billion dollars per year. “Can one imagine the uproar from the Private Sector Commission if half that sum were to be gifted to employed persons? The question is the capacity of the Government to execute the capital programme to ensure value for money,” the review noted.

Transfer payments is  another issue which the Government will have to confront sooner rather than later, Ram & McRae observed.

Speaking specifically to the Guyana Sugar Corporation, which has been allocated $9 billion in the budget, the review said GuySuCo continues to be a headache for the country.

The report of the Commission of Inquiry was welcomed by the firm but the Government has made it clear that the Commission’s recommendations are “not gospel”.

Finance Minister Winston Jordan

It acknowledged that the cost and consequences of closing the Wales Estate are deferred for a while longer but even so, the remaining parts of GuySuCo will continue to need huge subventions.

“For the next year or two, there will be budgetary support from Government companies and statutory bodies outside of a proper, certain and defined framework.We recommend that he [The Finance Minister] brings to Cabinet recommendations on a policy for Government companies, and statutory bodies which collect tax revenues but which are not explicitly required to pay over those moneys to the Consolidated Fund.”

The firm hopes that, sooner rather than later, the Minister will be addressing the report of the Tax Reform Committee.

Finance Minister Winston Jordan has said that the budget focuses heavily on infrastructure which will trigger job creation and at the same time stimulate the economy.

The Ram and McRae Chartered Accountants Firm is co-owned by Attorney and Chartered Accountant, Christopher Ram, who is also a member of the Working People’s Alliance which forms part of the coalition government.

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