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No new taxes
For the fourth consecutive year there are no new taxes, fees and fines in this Budget.
Private Sector Development
a. Incentives for value added investments
$350 million has been allocated the support of value added economic ventures including agro-processing, eco-tourism, garment manufacturing, jewellery and information technology and $200 million for the development of industrial estates.
b. Reduction in entertainment tax
In an effort to assist the cinema industry to re-tool and compete effectively in the rapidly changing entertainment industry there will be reductions in the Entertainment Tax: from 25 per cent to l0 per cent for urban cinemas, and from 20 per cent to 5 per cent for rural cinemas, both of them taking effect from April l, 2002.
c. Further Tax Concessions in Support of Tourism
In an effort to enhance the contribution of this sector, there will be an increase in the remission of Duty and Consumption Tax, equivalent to 50 per cent of the value of the investment for the expansion of existing, and the construction of new, hotels. This increase takes effect from April l, 2002.
d. Hotel Room Tax
The l0 per cent room tax for tourism facilities that are deemed to be Resorts is abolished effective April l, 2002.
Comprehensive Tax Reform
Government will embark on a study that will inquire into and make recommendations for reform of the tax system and tax administration, taking into account the impact on growth, competitiveness, revenue, poverty reduction and Guyana's international obligations. The terms of reference have already been finalised and they expect work to start in the first half of this year. On completion of the study, they will consult widely before finalising the document for implementation beginning in 2003.
Other Measures
Poverty Programme
About $2 billion will be spent on poverty-reductions as follows: SIMAP, $86l million; Poor Rural Communities Project, $315 million; Poverty Programme, $387 million; Linden Economic Advancement Project (LEAP), $352 million; and Basic Needs Trust Fund (BNTF), $54 million.
Subvention to Neighbourhood Democratic Councils and Municipalities
The sum of $259 million has been allocated to support local government bodies in the execution of their programmes.
Government's Position on Wages and Salaries
The Government has refrained from announcing any wage increase in the Budget. Instead, the Government is repeating its invitation to the Guyana Public Service Union to begin negotiations for a multi-year incomes package for public service for the period 2002-2004.
It says that this is in keeping with international trends, and is aimed at avoiding the yearly haggling and problems that characterise the present process. It will redound to the benefit of the Government, the Unions and, ultimately, the workers since it will remove the uncertainty about increased incomes over a defined period while allowing for better planning and timely implementation. Government says it views the upcoming rounds of negotiations as very crucial and hopes that they will be conducted in an atmosphere of civility, in which all issues could be fully discussed and resolved, in a spirit of compromise. It believes that this will pave the way for lasting peace, stability and harmony within the public service and implores the unions not to lose this opportunity to put the interest of the workers first, but to join as equal partners in moving the economy forward.