PPP/C Government increased disposable income for Guyanese by almost $200 billion

June 29, 2024

The People’s Progressive Party/Civic (PPP/C) Government wishes to firmly denounce the malicious and unfounded claims continuously propagated by Kaieteur News and other opposition-aligned entities, that the administration has failed to implement critical measures to increase the disposable income of the Guyanese people.

A comprehensive examination of the 2020 to 2024 budgets unequivocally demonstrates the government’s unwavering commitment to enhancing the economic well-being of all Guyanese, with over $200 billion returned to the pockets of citizens through a series of targeted and impactful measures.

A parent who received the ‘Because We Care’ education cash grant

Since taking office in 2020, the PPP/C Government has been resolute in its mission to alleviate financial burdens and improve the standard of living for the populace. This commitment is reflected in the extensive range of fiscal policies and relief measures meticulously outlined and executed across successive budgets. Each budget cycle has been strategically designed to address the immediate needs of citizens while laying the groundwork for sustained economic growth and stability.

Budget 2020: In response to the immediate challenges posed by the COVID-19 pandemic, the government introduced a suite of relief measures totaling over $40 billion. This included the reversal of Value Added Tax (VAT) on essential services such as electricity and water, the provision of a $25,000 COVID-19 relief voucher per household, and the removal of VAT on materials for critical sectors including housing, telecommunications, private education, and healthcare. These initiatives were pivotal in providing immediate financial relief and stimulating economic activity during a period of unprecedented global uncertainty.

Budget 2021: Building on the foundational measures of 2020, the 2021 budget allocated an additional $10 billion towards measures aimed at restoring the zero-rated status of essential food items and household necessities. Additionally, the government implemented a 5 percent reduction in water tariffs and introduced tax concessions on investments in agro-processing facilities, cold storage, and packaging. These measures were aimed at reducing the cost of living and encouraging local production and investment, thereby increasing disposable income and economic resilience.

Budget 2022: Recognizing the ongoing economic impact of the pandemic, the 2022 budget introduced further measures totaling over $25 billion. This included substantial cost-of-living adjustments, reductions in import duties and excise taxes, and targeted support for vulnerable communities and key economic sectors. Notably, the government reduced the Excise Tax on fuel to zero, resulting in significant savings for consumers and businesses alike.

Budget 2023: The 2023 budget continued this trend, with over $50 billion allocated to a range of initiatives designed to ease financial pressures on households and spur economic growth. Key measures included further reductions in freight charges, significant increases in the income tax threshold, and the expansion of social support programs such as the Because We Care cash grant and uniform voucher scheme.

Budget 2024: Significantly, this year’s budget commits over $70 billion to sustaining the government’s efforts to increase the disposable income available to citizens while ensuring their improved standard of living. This includes maintaining zero percent excise tax on petroleum products, extending freight charge reductions, and continuing the highly successful part-time job programme. Additionally, significant investments in housing, education, and public assistance underscore the government’s dedication to long-term socio-economic development.

Persons signing up for the part-time job programme

In total, the PPP/C Government has introduced measures which left over $195 billion in the pockets of Guyanese. The baseless claims by Kaieteur News and opposition-aligned entities fail to acknowledge these substantial and impactful measures.

The measures over the period have cumulatively increased disposable income, but the total estimate is vastly conservative as it does not account for the compounded impact of earlier policies continuing to benefit subsequent years.

The list below provides a comprehensive outline of some of the most critical measures featured within budgets 2020 to 2024.

Budget 2020

Reversal of VAT on electricity and water
Provision of $25,000 COVID-19 relief voucher per household
Removal of VAT on building and construction materials
Removal of VAT on cell phones
Removal of VAT on private education
Removal of Corporate Tax on private health care as well as VAT on medical supplies
The mining and extractives sector benefited from billions of dollars in incentives through removal of VAT on machinery and equipment; removal of VAT on all ATVs for mining, forestry and agriculture; removal of VAT on exports; and removal of VAT on lubricating oil.
Reversal of Land Lease fees across all sectors as well as water charges back to 2014 rates. There was also the reversal of land taxes and drainage and irrigation charges back to 2014. Reversing the increases (imposed during 2015 to 2020 period) to the 2014 levels significantly reduced these costs, which grew by between 67 percent and 1,900 percent.
Removal of VAT on fertilisers, agrochemicals, pesticides, and key inputs in the poultry industry.
Tax concessions on investments in Agro-Processing Facilities, Cold Storage and Packaging
In 2013, the PPP/C Administration introduced mortgage interest relief (MIR) to exempt the portion of taxable income used for housing loan interest from personal income tax, applicable to loans up to $30 million. The APNU-AFC Administration had revised this in 2017, limiting the relief to loans up to $15 million. The current government restored the MIR to its original level, making interest on loans up to $30 million tax-deductible, thereby reducing homeownership costs for new homeowners and young professionals.
To stimulate the economy, the Guyana government, via its 2020 budget, granted corporate tax relief to banks for low-income loans. This measure enabled low-income households to borrow up to an additional $2 million at a lower interest rate.

The annualised cost of these measures exceeded $40 billion.

Budget 2021

Government restored to zero rated status, all of the food items and other basic household necessities that were previously zero rated at the time the PPP/C administration demitted office in 2015. These items included: basic wheaten flour, basic breads, oats, unflavoured cracker biscuits, cooking oil, locally produced bedsheets and pillowcases, toothbrushes, etc.
A 5 percent reduction in water tariffs across the board, targeting all levels of consumers.
To improve access to ownership, the government zero-rated VAT 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.
Duty on Industrial Grade Cement reduced from 15 percent to 5 percent.
Ceiling on low income homes moved from $10 million to $12 million.

The annualised cost of these measures and others are approximately $10 billion.

Budget 2022

$5 billion for cost of living measures in light of the pandemic’s impact on the global supply chain.
Government rolled back freight costs to pre-pandemic levels. This measure alone cost the State in the order of $6 billion.
Government lowered the Excise Tax rate on gasoline and diesel from 20 to 10 percent. Later in March 2022, Government cut this tax further from 10 percent to zero – a measure that resulted in tax revenue losses of over $17 billion.
Introduction of a Dialysis Support Programme under which the government finances up to $600,000 per annum worth of dialysis treatment for every dialysis patient in Guyana. This programme provides much needed assistance to almost 300 persons at a cost of $180 million.
Reduction of cost for life and medical insurance. A measure that cost the State $1.1 billion.
Income tax threshold moved from $65,000 to $75,000 monthly, thereby releasing a total of $1.3 billion into the hands of taxpayers both in the public and private sectors.
As part of this Government’s suite of measures to combat the rising cost of living and supplement household income in 2022, the hinterland and riverain communities also benefitted from a $25,000 one-off cash grant, injecting more than $1.2 billion into these communities.
Further, almost 8,000 fisherfolk benefited from the provision of a $150,000 one-off payment totalling $1.2 billion
Over 1,400 sugar workers of Uitvlugt, who were affected by the Estate downtime, were provided a one-off payment totalling over $277 million.
In 2022, Government launched the part time job programme among the suite of measures implemented to cushion the rising cost of living. The job programme has allowed for one person per household to work in public offices in proximity to their homes for 10 days per month and earn $40,000. Over 11,000 persons were employed through the programme in Regions 2, 3, 5, 6, 9 and 10, injecting $2.3 billion into these households since the programme started in the second half of 2022.

Annualised cost of these and other measures, over $25 billion.

Budget 2023

$5 billion allocated for additional cost of living measures

Extension of reduction in freight charges for the period January 1, 2023 to December 31, 2023, at a cost of over $6 billion to the State.

$10 billion allocated to continue government’s part time job programme.

All workers benefit from increase in the monthly income tax threshold from $75,000 to $85,000, providing an additional $3.3 billion in disposable income to these workers, and removed over 12,000 workers from the tax net.

In January 2023, 5,000 health workers and almost 9,000 members of the Disciplined Services benefitted from salary adjustments, placing an additional $3 billion in the hands of these workers

In December 2023, teachers benefitted from several salary revisions. All Graduate teachers moved to the maximum of the scale applicable to their post at that time, benefitting 4,000 teachers at a cost of $1 billion annually. Additionally, effective December 2023, teachers received a monthly education allowance of $10,000 for a Bachelor’s Degree, $20,000 for Master’s Degree and $30,000 for a Doctorate Degree, to the benefit of over 4,500 teachers, at an additional annual cost of $500 million.

The Remote Areas Incentive for teachers was also revised upwards to $20,000 monthly, effective December 2023, at an annual cost of $260 million.

As part of the $5 billion cost of living allocation for 2023, public servants, teachers and members of the Disciplined Services, as well as staff of Semi-Autonomous Agencies and Public Enterprises were paid a $25,000 one-off tax-free cash grant in December 2023 at a cost of $1.7 billion.

At the end of 2023, an across-the-board salary increase of 6.5 percent retroactive to January 1, 2023, was paid to over 54,000 public servants, teachers, members of the Disciplined Services and Government Pensioners, placing $7.5 billion in the hands of these individuals. Notably, since assuming office in 2020, the cumulative salary increase for these groups of workers is 23 percent.

Members of the Disciplined Services also benefitted from the reinstituted one month tax-free bonus. For the first time, as well, the civilian employees of the Guyana Defence Force, also benefitted from the one month tax-free bonus. This placed in the hands of 12,000 members of the Disciplined Services an additional $1.5 billion which, it would be recalled, was callously taken away by the APNU/AFC during their term in office.

In 2023, the Because We Care cash grant and uniform grant benefited 201,281 public and private school students at a cost of $8.1 billion, and distribution of the grants will continue in 2024 to benefit 205,305 children.

In 2023, government introduced school grants for teachers to purchase supplies for their classrooms at a cost of $898.2 million, benefitting 182,672 children. In 2024, the sum of $3.1 billion is allocated to continue the distribution of school grants.

Annualised cost of these and other measures, over $50 billion.

Budget 2024

As global fuel prices remain relatively elevated, Government maintained zero percent excise tax on petroleum products since March 2022. This measure alone cost the State $40 billion annually.

$10 billion allocated to part time job programme

$7 billion allocated for cost of living measures

Old Age Pension moved from $20,500 in 2020 to $36,000 per month. This reflects a 75 percent increase in OAP since resuming office in 2020, and will benefit 76,000 persons, placing an additional $2.7 billion of disposable income in their hand.

Pubic Assistance moves from $9000 in 2020 to $19,000 in 2024, placing $1.2 billion in additional disposable income in the hands of over 35,000 persons.

The Because We Care cash grant of $40,000 this year has been substantially increased from $15,000 in 2021 when its disbursement resumed. Together with the uniform allowance of $5,000, this year’s grant to each child amounts to $45,000. Following the disbursement of the grants this year, Government will have disbursed $9.2 billion for this year alone, while for the period 2021-2024, a total of $26.9 billion in the cash grants will have been disbursed to school children under the programme.

Income tax threshold increased to $100,000. As a result, 13,000 persons were removed from paying income taxes and will result in $4.8 billion increase in disposable income of workers.

$4 billion set aside for GOAL scholarships. In previous years the allocation is as follows : $1 billion in 2021, $1.3 billion in 2022, and $1.8 billion in 2023.