Budget 2003
Unions say phone tax takes back threshold increase
Stabroek News
March 30, 2003
Union leaders say they are disappointed with Finance Minister Saisnaraine Kowlessar's $2000 per month increase in the income tax threshold announced in the budget.
So too is chairman of the Private Sector Commission Dr Peter deGroot who said that apart from the government's commitment to the introduction of a Value Added Tax (VAT) he did not believe that the budget had given anything to the general public. Also he said that he had to study the budget to see what the package to stimulate investment was all about.
DeGroot, like the trade unionists, was disappointed with the amount by which the threshold was increased, particularly in the light of the new 10 per cent C-Tax on telephone calls and the 5 per cent increase in the rate of the withholding tax. The withholding tax is now 20 per cent.
The threshold was raised from $18,000 a month to $20,000 meaning workers will take home an extra $400 per month.
But Kowlessar also announced the introduction of a 10 per cent Consumption Tax on all domestic calls whether from a landline or cellular phone and forecast the introduction of a Value Added Tax (VAT) from 2006.
Carvil Duncan, President of the Guyana Trades Union Congress and General Secretary of the Guyana Labour Union expressed disappointment with the small increase in the threshold while at the same time being faced with a new 10 per cent tax on domestic telephone calls. He pointed out the small increase in the workers' net pay as a result of the increase in the threshold would be wiped out by the tax on telephone calls if they were able to afford these.
Duncan said that he was disappointed too by the Government's apparent lack of effort and imagination in finding ways to ease the burden of the workers.
Lance Baptiste of the Guyana Teachers' Union, that is now locked in a pay dispute with the Ministry of Education, told Stabroek News that the increase meant that even the lowest paid government worker would be paying tax from their meagre earnings. For the teachers, he said it meant that all certified teachers would now be paying tax.
He said his union had hoped that the threshold would have been raised to $30,000, which would have cushioned the effects of what the teachers were feeling now.
Grantley Culbard, the General Secretary of the Clerical and Commercial Workers Union was also disappointed with the $2000 increase. He said that the unions had made representation to Kowlessar and that he seemed to be favourably inclined towards the unions' proposal for a $30,000 threshold or some figure more than $20,000.
Commenting on the tax on domestic phone calls Culbard said that the ordinary worker couldn't afford to pay the new 10 per cent together with the hike in electricity and water rates.
Patrick Yarde who heads the Guyana Public Service Union described the tax measures as an insult to the workers. He said increasing the tax threshold and then at the same time imposing the 10 per cent C-Tax on domestic phone calls meant the government was giving with one hand and taking back with the other.
He asserted that telephones were no longer a luxury but a necessity and one should be in every home, but with the imposition of the new impost, it was putting access to a telephone beyond the reach of the ordinary worker.
Yarde pointed out that even with the $2000 increase in the threshold the lowest paid government employee would still have to pay income tax. He said that to impose the new tax together with the already announced increases in electricity and water rates was an indication that the budget measures were not intended to bring relief. "It would have been better if the government had left the threshold where it was."
Guyana Agricultural and General Workers Union's (GAWU) President and PPP/C parliamentarian Komal Chand was also disappointed by the amount by which the threshold had been increased. He told Stabroek News that GAWU and National Association of Agricultural, Industrial and Commercial Employees (NAACIE) had made representations to Kowlessar for the threshold to be increased to $35,000.
However, notwithstanding his disappointment he understood the challenges facing the government as a result of the lack of investment and the resources which had to be diverted to deal with the crime situation.
Chand welcomed the government's announcement that it was moving to implement a presumptive assessment by the Guyana Revenue Authority, which would widen the tax net to include the self- employed and the professionals who do not now pay their fair share of taxes. "I hope it will materialise and not be just an announcement of intent."
He said if this measure was put in place it would help to ease the burden on those whose taxes by law were deducted and would allow the government to further in-crease the income tax threshold.
Chand said that he recognised that the government had to find more money but he did not know if it had explored all the possible avenues for mobilising the resources that it needed.
Despite several attempts Stabroek News was unable to contact a NAACIE official or the Georgetown Chamber of Commerce.
