AFC calls on Gov’t to adjust income tax threshold

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…. says move will increase disposable income for low income workers 

Dubbing Government’s proposed 7% increase for public servants as paltry, the Alliance For Change (AFC) is calling on the Irfaan Ali administration to adjust the income tax threshold to allow for low income workers to have more disposable income.

Speaking at a virtual press conference on Tuesday, AFC Executive Member Catherine Hughes, MP, said a total review of the income tax rate for all workers and for minimum wage is also necessary.

“Lest we forget, under the coalition government, minimum wage was increased by 26% in 2015; 10% in 2016; 9% in 2017; 8% in 2018 and 9% in 2019. In under five years, minimum wage had risen from $39,540 to $70,000. It was a feature of the coalition government for the lower paid public servants to receive a higher percentage increase than those at the higher end of the pay scale,” she told the press.

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The Opposition Member of Parliament said the 7% across the board salary increase for public servants is unconscionable, and is intended to further divide the society.

Hughes said the offer comes at a time when inflation rate is 14%.

“…a 7% increase just does not cut it. Every household, every small business, the mini bus operators, the water coconut vendor, the lady selling food, everyone has been affected by the rising cost of living.

Small business cannot adequately restock as they have seen sales decline while the cost of supplies to restock has increased. Prices have increased for most food items, the costs for construction materials have gone up, for some items it has doubled. Persons who took out loans and mortgages using prices from four or six months ago now find that the loan is insufficient and they are forced to find the additional money or halt construction,” the MP reasoned.

Hughes said the Government knew fully well that the workers’ unions would not have accepted such a meager increase when the inflation rate continues to skyrocket.

“The government is aware that the workers’ representatives would not accept increases less than the inflation rate so they have forced a paltry 7% down the throat of workers. No consideration for the increased cost of living and suffering of so many workers,” she said.

It was noted too that by making the 7% increase across-the-board, the government will allow for public servants at the higher end of the pay scale to receive more on their salaries while a pittance is added to the low income worker.

“For example, a public servant earning $400,000 will receive an additional $28,000 while the worker taking home minimum wage will have $4,900 before tax, added to their salary. This is clearly designed to drive a further divide between the haves and the have nots in our society, to make the rich richer and the poor poorer. Even the worker earning $140,000 will see less than $10,000 added to their salary,” the AFC Executive pointed out.

She contended that Government was heartless to add a mere 7% to the salaries of workers, and then tax it.

Hughes said in the current economic crisis, it is those with low earnings, who need the most assistance.

“A $4,900 increase, when taxes are deducted would not even cover the current cost for a 20-pound cylinder of cooking gas. There is no money for another packet of milk or bottle of oil. No money left over there to buy sweets for the children. We need and must do more for low income earners; a 14 percent increase will barely off set the increased cost of goods, it will barely cover increased inflation,” she further reasoned.

Weighing in on the issue, Dr. Vincent Adams, another AFC Executive, said the 7% should not be considered an increase but rather a decrease given the rate of inflation.

“In real terms, it was a 7% decrease in salary. Inflation is 14%…an at a minimum, salary should be increased to meet the inflation rate. So it is really a decrease,” he contended.

Trade Unions across Guyana along with other political parties – such as the A Partnership for National Unity + Alliance For Change (APNU+AFC) and the Working People’s Alliance (WPA) – have also condemned the proposed increased. The Guyana Public Service Union (GPSU), in particular, has called on President Irfaan Ali to take corrective measures by first consulting with the unions in accordance with the Collective Bargaining Agreement.



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