A study of the tax system will be done this year, and according to the officials, consultations should be completed by the end of the year.

"I think the Government has made it quite clear that there is a timetable in place, the terms of reference have been set (and) the consultant should be here shortly," Budget Consultant in the Finance Ministry, Mr. Winston Jordan said.

He said too that the Government has committed itself in the 2002 Budget speech by Finance Minister, Mr. Saisnarine Kowlessar in the National Assembly Friday, to implementing these tax reforms next year.

The announcement came at a post-budget news conference at the GTV 11 studios in Georgetown by three of the main architects of the $68.9 billion Budget - Minister Kowlessar, Jordan and Director of the Budget Unit in the Finance Ministry, Dr. Ashni Singh.

"As we have said in the budget, the question of tax reform has to evolve out of a study of the system itself, so we are going to have that study done this year. Already we have drawn up the terms of reference for the study," Kowlessar told reporters.

The Finance Minister also noted that he had a discussion only yesterday with an official from the recently-established Caribbean Regional Technical Assistance Centre (CARTAC), based in Barbados, on the whole issue of tax reform here.

"We have already agreed to the terms of reference and it's now just awaiting the consultant to come in and to start working on the tax reform itself (since) we would like to have a complete and comprehensive tax reform," he said.

Linking the reforms in the tax system to the issue of not raising the income tax threshold from the $18,000 it is currently pegged at, Kowlessar said: "We have considered the question of the income tax threshold but there are a number of factors which we had to consider such as the question of (limited) resources.

"But the major reason for not dealing with anything that has to do with the income tax threshold is the same reason - we want to engage in a comprehensive reform of the tax system."

According to him, this does not entail having a "piecemeal" approach to the subject "but to look at the thing in a total way so that sometime, by the end of this year or next year, we can come out with a positive position on the whole question of taxes."

Responding to a question about why it took so long to get only to this stage of the tax reform process, Jordan said tax reform can be looked at in two ways - in the short-term "where you just fix the system immediately", and the longer-term in which there are a set of societal and governmental objectives. The tax system is part of the mechanism that can be used to promote things like investments and businesses towards the goals that the Government is trying to accomplish, he said.

He also recalled that a three-year State paper on tax reform was laid in the National Assembly in 1994 and most of those initiatives were implemented over the three-year period.

"And that was a major effort...so it is not fair to say that it took eight or nine or ten years before you implemented tax reforms," the Budget Consultant asserted.

He reasoned, "we ought not to be tinkering with the tax system in a major way every year."

"You ought not to; you may intervene just to smooth out certain things that you see and that you don't like but we ought not to tinker with the tax system in a major way every single year," he said.

"So from 1997 to now, it is not a very long time to be again doing comprehensive tax reform," he added.

Kowlessar also pointed out that within that timeframe, the Guyana Revenue Authority was established. "We have instituted the GRA, so that in itself is one positive development that is geared towards improving the tax system and improving tax efficiency and tax collection," he told reporters.

Meanwhile, the Finance Minister also noted that more than $1 billion has been allocated in this year's Budget in a `Revision of Wages and Salaries' section which will cater for a possible pay hike in public servants' wages and salaries.

"We have got an allocation in the budget out of which salary increases are traditionally paid. The quantum of that allocation this year is a little bit more than $1B but one needs to be guarded though that the whole of that amount doesn't go to the payment of salary increases for public servants only," Singh explained.

According to him, there are other expenses coming out of that for "other related expenses".