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….cuts water tariffs by 5%
By Svetlana Marshall
Guyanese can expect a reduction in the cost of basic food and household items along with a 5 per cent reduction in water tariffs, Senior Minister within the Office of the President with responsibility for Finance, Dr. Ashni Singh said as he unveiled a menu of measures, on Friday, aimed at providing relief to both businesses and households as the country, like the rest of the world, grapples with the effects of the Coronavirus Disease (COVID-19) pandemic.
In presenting his $383.1B Budget to the National Assembly for the Year 2021, the Finance Minister said, Government, in an effort to reduce the cost of basic food and household items, will be restoring the VAT Zero-Rate on those items.
“Mr. Speaker, during the PPP/C’s prior tenure in Government, an extensive list of basic necessities were zero-rated so as to ensure that the VAT did not lead to an increase in the cost of these goods and services or become burdensome on taxpayers. However, the APNU+ AFC over their term in office moved a number of these items from the zero-rated category to either the standard-rated or exempted category,” Minister Singh said.
He said the removal of the taxes on these basic items is in keeping with the PPP/C’s Manifesto promise. “We will restore to the zero-rated status [for] all of the food items and other basic household necessities that were previously zero-rated at the time we demitted office in 2015. These items include: basic wheaten flour, basic breads, oats, unflavoured cracker biscuits, cooking oil, locally produced bedsheets and pillowcases, toothbrushes, etc,” the Senior Minister explained.
Similarly, the Finance Minister said the cost of construction and home ownership will be significantly reduced as a result of a decision by the Administration to zero-rate certain construction materials.
“The construction sector is a key sector and contributor to our economic development. Along with the significant developments that we will see taking place within the sector over the medium term, the PPP/C Government has committed to providing 10,000 house lots annually. We have worked tirelessly to clear the backlog of applications and to promote home ownership across the country while providing access to financing, recognising how important homes ownership is to the economic empowerment of individuals and families,” he reasoned.
He said to foster greater homeownership, the Government has proposed to zero-rate the VAT for stone imported for construction and housing from CARICOM; locally produced pre-stressed concrete piles; locally fabricated mild steel beams for building construction and locally manufactured roofing and PVC products for building construction.
“Speaker, we will also continue to monitor the cost of basic construction materials, such as cement and steel, and examine the possibility of applying relevant taxes in such a manner as to serve as a adjustor to cushion the impact of steep price escalation,” he said while announcing that there will be a reduction on duty for Industrial Grade Cement from 15% to 5%.
Further, the Government, Minister Singh said, will be moving to increase the Low-Income Mortgage Ceiling from a low of $10M to a high of $12M. The PPP/C Administration will also be increasing the Ceiling for Housing Loans at the New Building Society
“Currently, the ceiling on loans that the NBS can grant is $12 million. We are proposing to approve an increase in the ceiling to $15 million. This will also enable borrowers desirous of borrowing within that range to access financing from the NBS,” he told the House.
Additionally, the Government, Minister Singh said, will be moving to cut the water tariffs by 5% for all levels of consumers
The Senior Minister said too that the Government also intends to reduce the cost of connectivity. He said the Government has been actively working with stakeholders in the diffusion of ICT across all sectors and regions of Guyana as a means of economic and social empowerment for our citizens.
“The swift liberalisation of our telecommunications sector and the ensuing benefits that competition has brought through lower prices and a push to improve services have delivered on the initial step of the PPP/C’s promise and vision for enhanced ICT services. To continue along this path Government is proposing to remove the VAT on data for residential and individual use, he told the House.
Further, he disclosed that the cost of transportation in the Hinterland will be reduced. In particular, VAT will be removed from ATVs for mining, forestry, agriculture and manufacturing. To further reduce the cost of transportation for hinterland communities and operators, the Government will remove the duty on ATVs for use in the hinterland.
Additionally, the Government will be introducing a cash grant of $15,000 per child to be given to the parents of children in the nursery, primary, and secondary schools in the public school system. As indicated earlier, he said Old Age Pension will be increase from $20,500 to $25,000 with effect January 1, 2021. Added to that Public Assistance will be increased from $9,000 to $12,000 monthly.