“Silly season no excuse for allegations” – Min Jordan
“public should conduct due diligence and research and reject misinformation”
DPI, Guyana, Thursday, January 16, 2020
Finance Minister Winston Jordan upbraided, Deodat Indar for his “wild allegations” on critical aspects about the economy. According to reports, the People’s Progressive Party (PPP) aspirant member sought to “mislead” persons during a recent roadside meeting.
Indar, according to the Finance Minister, “attempted to persuade voters through the peddling of distorted information”, which “is tantamount to abuse of public trust.”
“We are quite appalled at his interpretations of economic issues, and are, equally, flummoxed at his allegations and fear-mongering on critical aspects of the economy. To the less informed, his ramblings would have been sure to cause anxiety.”
Among the “false allegations,” was that government has spent all the money and sold all of the gold reserves at the Central Bank. According to Minister Jordan, a cursory check with the Bank of Guyana will confirm that reserves have always been positive. Additionally, the minister said reserves of the bank are held distinctly and separately from the Consolidated Fund, the latter of which is used by the government for expenditure.
Another claim made was that Guyana was unable to pay its import bill because the government has spent it all. The Finance Minister rebutted, “The reserves of the Bank of Guyana are used, principally, to pay for the imports of fuel and the servicing of Guyana’s external debts. All other imports are financed through the commercial banks, foreign currency accounts retained by approved persons and/or foreign direct investment…. the Central Bank’s reserves are adequate to meet the identified imports.”
It should be noted that reports from the international financial institutions on Guyana’s economy including the most recent International Monetary Fund (IMF) Article IV Country Report never commented negatively on the state of Guyana’s reserves. Those reports also lauded the government’s efforts to avoid the resource curse and its management of the economy.
The repeated false claim that the administration has instituted 200 taxes since coming into office was also refuted. Minister Jordan stated that contrary to the allegation, more than 100 reform measures were instituted that benefitted businesses and individuals.
Notable achievements among the progressive measures were substantial movement in the income tax threshold, from $600,000 to $780,000 or 1/3 of gross income, whichever is higher; lowering of personal income tax to 28 per cent on the first $180,000 of chargeable income per month; removal of income tax on employees’ NIS contributions; lowering of company income tax to 25 percent; lowering of VAT to 14 per cent; increasing VAT threshold to $15 million; and increasing the number of zero-rated and VAT exempt items.
In specific response to Indar’s claims about VAT on forestry products causing imported pinewood to be sold cheaper than local woods, it was pointed out that, the Minister of Natural Resources Raphael Trotman had stipulated import permits for traders of pinewood as another means of managing its importation and ensuring that it cannot be sold cheaper than local wood products.
“$120 Million was set aside to begin a forest inventory; that logs and rough lumber for the sawmilling industry became VAT exempt from January 1, 2018; that $50 Million was allocated for the establishment of a dimension stockyard.”
It was pointed out that the Guyana Revenue Authority (GRA), which now enjoys real autonomy, has strengthened its monitoring and enforcement which has resulted in a substantial expansion of the revenue base and facilitated the massive increase in workers’ wages and development across the country.
“More persons and businesses are now paying their true and correct taxes as a result… the economy is growing and therefore, it naturally follows that the tax base will grow and, by extension, so will the amount of tax revenues collected,” Minister Jordan stated.
Despite the existing facts Indar still accused the government of spending $1.2 trillion which, he said, cannot be accounted for. The Finance Minister countered stating, “the Ministry of Finance has made public all of the government’s spending through the publication of the annual budget, the Mid-year report and similar reports and publications from the National Tender Board and Administration. In addition to infrastructural, social, educational and other projects, the government has had to repay billions of dollars in judgement won against the former government by local and overseas investors and businesses, bailout GuySuCo to the tune of nearly $50 billion, and subsidize the tolls for citizens using the Berbice Bridge.”
Debunking Indar’s contention that the government has no plans for oil and gas revenues; the Finance Minister referred to the Natural Resource Fund (NRF) Act, which provides for the mechanism that will govern how revenues earned from our natural resources will be saved, spent or invested with full Parliamentary and public oversight.
Further, the government remains committed to managing these revenues according to best practices, including the Santiago Principles, as demonstrated by Guyana’s recent acceptance as an associate member of the International Forum of Sovereign Wealth Funds (ISFWF).
The Green State Development Strategy also sets out the country’s priorities, and oil revenues will be utilised within this national development plan’s context. Additionally, the final draft of the Local Content Policy is being reviewed.
In referring to local content, Indar falsely claimed that locals do not benefit from similar concessions as investors in the oil and gas sector.
“This is palpably false; it has been debunked on several occasions by the Minister of Finance and the Commissioner-General. The investment agreement signed between the government and operators in the oil and gas sector states very clearly that the operators and their subcontractors will benefit from the same concessions, no matter their nationality,” said the minister.
Referencing the allegations made by Indar, the minister underscored, ‘the silly season’ (elections period) does not give any person the license to make unfounded pronouncements and believe that those pronouncements will go uncontested.”
The Finance Ministry further called on the public to conduct due diligence and research and to reject misinformation.