Home / Op-Ed / Op-Ed: ITS NOT ABOUT NEW TAXES MR. JORDON, ITS ABOUT THE ALREADY HIGH BURDENSOME TAXES
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Op-Ed: ITS NOT ABOUT NEW TAXES MR. JORDON, ITS ABOUT THE ALREADY HIGH BURDENSOME TAXES

APNU+AFC’s Finance Minister made a huge deal recently and his colleagues are parroting the meaningless Budget 2018 promise that there would be no new taxes in the 2018 budget.

It is a meaningless promise because the problem is not simply how many more taxes APNU+AFC will increase in its 4th budget since assuming office, given that the most noteworthy feature of the three previous ones is that each massively increased taxes for the people. What the Guyanese people from all walks of life, but particularly the working class people, are looking for is a tax relief.

In its 2015, 2016 and 2017 budgets, budgets that were supposed to establish frameworks for “a good life”, APNU+AFC and Jordon increased taxes through higher rates for existing taxes and the introduction of new taxes. Whether old taxes or new taxes, the Guyanese people were subjected to burdensome taxes in more than 200 different taxes, with unbearable increases in cost-of-living. There were new taxes, for instance, through VAT for education, water and electricity, all of which were always treated in Guyana by the previous PPP governments as public good, things exempted from taxation. Even donkey carts had to pay increased licensing fees. Farmers were forced to pay taxes for the small scale cash-crops they either sold from their homes or at community markets. House-front vendors, selling sugar cake and cane juice had to pay taxes. This is what concerns the Guyanese people. This track record of Jordon and APNU+AFC is what stirs fear among people.

The truth is there is little new taxes that can be introduced since there were so many in the 2015, 2016 and 2017 budgets. The truth is that the more than 200 new taxes, either because they were introduced for the first time or because they were increased, do not permit any room for new taxes. What the people are looking for and what business is looking for in order to catalyze the economy is a tax break. The demand of the people is for tax relief. Jordon, Nagamootoo and their colleagues are playing wordsmith – they say no new taxes, but do not mention anything about reducing taxes. But reducing taxes is the crux of the matter.

Since 2015, there have been robust protest and dissatisfaction relating to the burdensome taxes. Workers, poor families, the business community, particularly the small, village-level businesses, professionals, across the political divide, have all protested in vain about the new taxes. Indeed, there have been across-the-board condemnation and protracted public protest and public-shaming of Jordon and APNU+AFC for introducing taxes on private education, including school fees, and educational materials. It forced the AFC and the WPA to publicly, but shamelessly, disown the taxes, even though they voted for it at Cabinet level and in Parliament. Recently, Jordon and Nagamootoo and others from APNU+AFC have hinted that Budget 2018 will rescind VAT on education.

VAT on Education is a social justice issue. The PPP moved a motion for rescinding the education VAT, but the Speaker did not allow the motion to proceed. The 2018 Budget must remove VAT on education, but it will not remove the stain on APNU+AFC. It must return the money it collected on the education VAT to the people.

Moreover, APNU+AFC and Jordon must restore the $10,000 per child in school “Because We Care” subsidy. While not technically a tax, its removal is like taxing every child. This was a program introduced by the PPP and was supposed to be increased annually. The PPP had promised that by 2020, the annual subsidy would have been increased to about $50,000 per child. These are meaningful proposals, not merely empty words.

Then there is the VAT on electricity and water. Electricity and water are public good services and part of the social justice agenda that the 2015, 2016 and 2017 budgets changed to punish people. Not only must they remove these VAT charges, they must restore the subsidies that provided relief for Guyana’s senior population. In addition, people have not paid any attention to the financial relief the PPP government implemented throughout the period 1993 to 2015 when they reduced electricity rates based on fuel cost for GPL. In fact, for sugar estates which have been closed, the 2018 budget must cater for a special electricity and water subsidy for families, similar to what have been provided for Region 10 for decades now.

After criticizing the PPP for almost two decades for not increasing the tax threshold enough, APNU+AFC has become ultra-conservative in managing tax thresholds. In a remarkable turnaround, the PPP embarked on significant increases of the low tax threshold ($about $6,000 in 1993) they inherited from the PNC after they assumed office in October 1992. By 2015, the tax threshold was increased to over $50,000 per month. In the 2012 Budget, APNU and AFC demanded the threshold be increased to over $100,000 per month. This demand was made previously also and in the 2013 and 2014 budgets. In fact, they promised that in their first 100 days in government, they would revolutionize the tax threshold. This will be their 4th budget since assuming office. The 100 days promise has been jettisoned by greed and they betrayed the working class. The working class of Guyana expects to see a tax threshold of $100,000 per month and nothing less because a promise is a promise.

Jordon, Nagamootoo and APNU+AFC have made a big deal about consultations and have been critical of the PPP not attending consultations. We know the history. The supposed-consultations have been a charade. We must commend the PPP for taking the practical and transparent approach of introducing a Parliamentary motion with their proposals for Budget 2018. APNU+AFC has blocked this motion from moving forward. Now they must consider the proposals and include them in Budget 2018. The people are looking for concrete action, not empty rhetoric.
Dr. Leslie Ramsammy

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