Jagdeo slams Govt’s pathetic attempt to justify tax burdens
…as Govt assures high “take home” salary for workers
As criticisms continue to mount over Budget 2017 that was presented on -Monday last, the APNU/AFC coalition Government continues to be mum on the reactions by Guyanese.
In fact, Opposition Leader Bharrat Jagdeo is of the view that the senior members of the Government have gone mute and are now relying on their junior “spin doctors” to defend the indefensible budget.
Dr Jagdeo, in a statement last evening, was responding to a previous communiqué issued by Director, Department of Public Information, Imran Khan, earlier in the day.
Khan in a statement said: “The new tax measures announced by Minister of Finance Honourable Winston Jordan will inject some $9,595,000,000 into the Guyanese economy. This represents the amount which the Government will forego from the national treasury and is in effect a massive stimulus package.”
However, according to the Opposition Leader, that release by Khan was a most lopsided and self-serving piece of propaganda: “It is nothing more than a pathetic attempt to justify and defend the humongous tax burdens that this budget places upon the back of every single Guyanese, whether in the public, or Private Sector.”
He pointed out that Khan in the statement detailed the costs to the Treasury of reduction of VAT, reduction of Personal Income tax, reduction in Corporation tax and increase in the VAT threshold, which amounted to a total of $9,595,000,000. The Opposition Leader noted that this is only a fraction of the effects of the budget.
“The statement deliberately omits to calculate the windfall in revenue that VAT will generate, on electricity, on water, on basic food items, on educational materials, on pharmaceutical and health supplies, and on services such as internet, school fees, educational and health services and a host of other goods and services that are not currently Vatable,” he stressed.
Jagdeo explained that the statement from the Director of Public Information omitted to recognise the billions of dollars which will be collected from the increase of Personal Income Tax from 30 per cent to 40 per cent and on allowances; the increase in Travel Tax, the increase in Corporation Tax, a new Environmental Tax and a host of other new tax measures.
Moreover, he outlined that the release deliberately failed to allude to the billions of dollars that will be generated by the increase of fees in over 50 different areas, including, increase fees for late filling of Personal Income Tax, Corporation Tax, Property Tax returns, increase in interest rate for late payment of tax, astronomical increase for fines for failing to keep proper tax records, new and higher fees for passports, higher fees for driving permits, higher fees for certificates of compliance, increase in several dozens of fees under the Customs Act, increase in a number licensing fees and the imposition of a two per cent tax on contractors.
Furthermore, Dr Jagdeo asserted that Khan also deliberately excluded the billions of dollars that will be received from Government spending which now attracts VAT. In fact, he referred to page 73 of the Finance Minister’s budget speech, where he said “tax revenue is expected to increase by 8.9 per cent to 162.6 billion, reflecting a considerable increase in collections of VAT due to the measures to be implemented in 2017.”
According to the Leader of the Opposition, no amount of propaganda from any “spin doctor” can change and distort the very clear language of the Finance Minister himself. Jagdeo noted that it is estimated that conservatively, the Government will receive an increase in taxes of approximately $25 billion in VAT alone.
On the other hand, the Opposition Leader went onto to address the electronic programme created by Government called the “salary calculator”, which Khan said computes salaries under the new system and will show the increased take-home salary, total taxes to be paid and the National Insurance Scheme contribution.
Dr Jagdeo noted that this was an attempt on the part of Government to deflect criticisms on the new measures imposed by the budget.
“What the calculator will never tell the citizen is: what is the real spending power of his/her salary as a result of this budget. The calculator does not tell the citizen that their allowances are now subject to tax. This new calculator will also never tell the citizen by how much their cost of living has skyrocketed as a result of this budget,” he explained.
The Opposition Leader posited that added to a “draconian and an inhumane” budget, Guyanese are now faced with a situation where they have to cope with “insensitive and idiotic” attempts by the Government to insult and mock their collective intelligence.
Meanwhile, Khan in his statement pointed out that the reduction of VAT from 16 to 14 per cent “will dent” the national treasury by $4.8 billion while the loss from the reduction in Personal Income Tax will cost another $3.8 billion. He noted that the Government can assure that all employees under the new proposed Personal Income Tax system will have a take-home salary, come January 2017, which is higher than their current take-home salary.