While Government Ministers are still benefiting from their 50 per cent salary increases that they afforded themselves upon ascension into office, in addition to a host of amenities prescribed to their tenure such as free, phone, electricity and water among other utilities, they are expecting the citizens to adjust their lifestyles to cope with the impending VAT measures, aimed primarily at increasing the Government’s revenue base.
This public conservative approach was alluded to by Communities Minister Ronald Bulkan, who is of the firm view that the 14 per cent Valued Added Tax (VAT) which the 2017 Budget proposes that citizens pay on electricity bills exceeding $10,000 monthly, and water bills exceeding $1500 monthly would not affect them, provided that the conserve on the amount of water and electricity they utilize.
Bulkan speaking during a programme, “Budget in Focus”, aired on the National Communications Network (NCN) explained that with regards to the VAT on the water, he has done some calculations. He said that, for the VAT consumption at $1,500 per month, the tariff for someone living outside of Georgetown is about $61 per cubic meter of water and that this, “works out to 12 of those large black tanks per month so if a consumer can keep their consumption at two-and-a-half days for one of those 400 gallon black tanks, then the VAT does not apply.”
The tariff in Georgetown is a little higher and as such, Minister Bulkan explained that for a person living within the town, to keep their utility bill under $1500 per month, they would have to make one of those large black tanks last for four days.
“I do not think that there is any secret that there is a lot of waste of water out there, and whilst it is true that there is this popular opinion that water should be free because it is widely available, it is the delivery of that water, purified and treated that there is a cost incurred,” the Minister said.
He noted that the tariff that is being applied does not cater for the entire production cost and therefore, “it is important that as a nation, as individuals, we begin to practice conservation,” he said.
On the question of the 14 per cent VAT on electricity at $10,000 per month, Minister Bulkan also did some calculations and he said, “for the consumers that have a fridge, a washing machine, two fans, a microwave and a television and standard lighting, with the current tariff of $43.43 per kilowatt, their light bill will average $8,500 per month.”
He noted that this speaks to over 85 per cent of the customer base of Guyana Power & Light (GPL). “It is only the persons who are well off, who have air-condition, and such would the VAT apply to,” the Minister said.
According to Bulkan “of course we all have heard the naysayers out there seeking to condemn the budget. I hear the Leader of the Opposition refer to it as an ominous budget, but I believe that when the impacts resulting from the execution of the measures that are in the budget are felt, that verdict that we would hear from the average person would be a positive one.”
Apart from the Opposition Leader, the Private Sector Commission, the business community and others including economists have spoken out against some of the repressive measures outlined in the 2017 Budget.