Mortgage interest relief ceiling raised to $30M
−Corporation tax on health, education reversed
The PPP/C Government has amended several laws to reverse a raft of taxes imposed by the APNU/AFC government.
The amendments approved in the National Assembly on Tuesday are part of the Government’s Manifesto plans to improve productivity and return money to the people.
Among the amendment bills were those to amend the Auctioneers Act, the Corporation Tax Act, the Hucksters Licencing and Control Act, and the Income Tax Act.
Amendment to the Corporation Tax Act
The amendment to the Corporation Tax Act sought to remove the imposition of the 25 per cent tax on private education and health care delivery. Minister of Public Works Minister, Hon. Bishop Juan Edghill said it seeks to address improvements, and increase the affordability of private education and healthcare institutions.
Attorney General and Minister of Legal Affairs, Hon. Mohabir Anil Nandlall said the Government’s decision to reverse the taxes would bring significant benefits to citizens.
“This bill is simply the tip of the iceberg of what is to come in the health and education sector. We are simply laying a part of the foundation of a grand plan that we will unfold within the next five years for the education and healthcare sector,” the Attorney General said.
Minister within the Ministry of Public Works, Hon. Deodat Indar also voiced his support for the amendment. He said it means the scope for investments into health and education would be broadened.
“Guyana has been short-changed with new investments, new foreign direct investment over a number of years. Simple reason … is when any investor sits and looks at a business case analysis justification if to go into our country to carry out business, the tax rate is a disincentive to that investment, so investors stay away from Guyana.”
Amendment to the Income Tax Act
The Government has doubled the ceiling for people to access and benefit from mortgage interest relief. The ceiling has been raised from $15 million to $30 million, following the amendment to reverse a measure imposed by the previous administration.
Mortgage interest relief was implemented in 2013 by the PPP/C. Its aim was to put money into the pockets of first-time homeowners by giving them a break on the deduction of their income tax once they were paying mortgage interest to an institution where a loan was taken to build or buy a home.
Minister Edghill explained that the amendment would benefit middle-income citizens.
“Let’s say a potential homeowner takes out a mortgage of $18M, with terms for 30 years at an interest rate of 9.5 per cent, incurring a monthly interest 0f $85,000 over the life of the loan. An individual earning a monthly income of $150,000 can receive more than $21,000 additional income at their disposal each month or more than $250,000 each year, if they are a first-time homeowner,” the Minister explained.
Amendment to the Hucksters Licencing and Control Act
Minister Edghill said this measure would be a welcome relief to hucksters.
He added that the previous administration burdened the population with taxes, even targeting the ‘small man.’
“The increase to $62,500 to licence hucksters not only led to tax evasion … men started dropping under GRA’s radar; it almost encouraged non-compliance and non-licencing. People who wanted to walk on the straight and narrow path, ensuring that they are in keeping with what needs to be done, started hiding,” he explained.
The amended Act will see the vendor who is travelling on foot or with a man-propelled vehicle only paying $2,030. Those who travel by horse cart or other beast-bearing or drawing burden will pay $7,250 while those using a motor vehicle, $36,350.
Prime Minister, Hon. Brigadier Mark Phillips supported the amendment saying by reducing the licencing fees, the Government is creating opportunities for people to have more disposable income, thereby increasing their spending power.
“All of us are accustomed to hearing the huckster whenever he or she enters our community. Many hucksters produce children who are engineers, doctors, lawyers, business executives, and tycoons on that little income and therefore the reduction in taxes is very important for these ‘small people’ to continue to develop Guyana,” he stated.
Amendment to the Auctioneer’s Act
This bill sought to amend the Auctioneers Act Chapter 91:07 by decreasing the fees to be paid for an Auctioneer’s licence.
The APNU/AFC Government in 2016 increased the cost of the licence from $7,000 to $40,000, an almost 500 per cent increase. The fee has been reduced to $23,500 with the latest amendment.
Minister Edghill said the amendments to all of the Acts demonstrate the Government’s commitment to the people.