With Guyana’s economy not performing at its best, the Private Sector Commission (PSC) has outlined a list of recommendations which it believes could stimulate growth.
Among those recommendations is for the Government to raise the income tax threshold to $100,000 in the 2017 Budget.
“The Private Sector Commission believes that there are several measures which would stimulate the economy and lead to balanced growth, as well as have a positive impact on Government revenue in the medium and long term” the PSC statement said.
In the 2016 Budget, the Government raised the income tax threshold from $50,000 to $55,000.
According to the body, the economic slowdown in Guyana started two years ago, and while GDP growth is expected to reach 4 per cent in 2016, the PSC believes that the growth is primarily attributed to increased production of gold, especially by large-scale production.
However, the group noted that this has masked the decline in performance of other economic sectors, but this decline is having far reaching implications for the business sector.
As a result, the PSC outlined several recommendations which it believes would stimulate the economy and lead to balanced growth, as well as have a positive impact on Government revenue in the medium and long term.
In terms of fiscal measures, the Commission believes that there should be; an increase in the income tax threshold to $100,000; a permanent reduction of the Corporate Income Tax rate, over 10 years to 20 per cent; a reduction in Personal Income Tax over 10 years to 20 per cent; concessions on income taxation for the creation of new employment in all value added sectors; tax breaks for new tourism assets; tax breaks for companies which set up operations in depressed communities; concessions on export tax for businesses which export; relief on outstanding loans for rice industry; make security equipment free of all taxes; increase income tax threshold to $100,000 per month; and make all overtime earnings tax free.
Enforcement of tax laws
In the area of enforcement, the PSC believes that there should be compulsory Value Added Tax (VAT) registration and enforcement of VAT collection on all businesses which currently do not collect this tax.
Regarding infrastructure, the Commission recommended that there be speedy implementation of all Government projects to release Government spending, implementation of the plans for an alternative East Bank road and urgent approval of a harbour finance model.
The body also called for implementation of all PSC supported infrastructure projects, an alternative Demerara Bridge and dredging of the Demerara Harbour.
Commencement of the process to design and build the Lethem Road which should be completed in five years was also recommended.
The PSC proposed the appointment of an Economic Council for Guyana which should be a non-political Council, legislation for internal audit departments in all government agencies and the introduction of Bankruptcy Protection legislation.
The Commission believes too that government should enact mergers and acquisitions legislation, finalise and table the E-Transactions Bill, and revise the Small Business Act.
In the area of energy, the Commission suggested that government should facilitate a process of ensuring reliable energy is provided at US$12 cents per KWH.
Other broad-based measures which the body outlined were; targeting a GDP growth rate of 8 percent, inflation rate of 2 per cent and unemployment rate of 8 per cent; retaining a system of zero-rating for selected goods for relief of lower income persons; sponsoring workshops on corporate governance of state-owned enterprises; grading contractors in tiers related to their past performance; revising trading rules to introduce odd lot system; outlining a statement on an Economic Strategy/ Plan for Guyana; devising and implementing a plan for the industrialisation of Guyana; reducing the purchase of Treasury Bills by 20 per cent from prior year to increase liquidity and reduce commercial bank interest rates; liberalising the telecommunications sector; implementing regulations and enforcing the new Act; regularising national solid waste management; completing its membership of Extractive Industries Transparency Initiative; utilising GGMC funds to commence set up of Sovereign Wealth Fund; finalising Single Window System; hosting investors’ conferences; increasing spending on marketing of Guyana, especially for tourism; improving Emergency Response and 911 systems; fund and operationalising Procurement Commission and the Integrity Commission; upholding its manifesto promise of increased salaries for public servants; implementing an enabling environment to improve ranking on Doing Business index; and outlining plans for diversification of eco-tourism.