Govt tables a whopping $1.38 trillion Budget

– $90B  allocated to reduce cost of living, increase disposable income 

Guyana’s largest fiscal framework, totaling over $1.38 trillion, is anchored by a $90 billion in relief measures intended to reduce the cost of living and increase disposable income for thousands of Guyanese.

The proposed measures were announced by the Senior Minister in the Office of the President with Responsibility for Finance and the Public Service, Dr Ashni Singh during his presentation of the 2025 national budget.

Pensioners, persons living with disabilities, working individuals and families are key beneficiaries, with substantial allocations earmarked this year.

SUPORT FOR THE VULNERABLE & FAMILIES

Old-age pension has increased to $41,000, signalling a fulfillment of a commitment outlined in the People’s Progressive Party/Civics’ 2020-2025 manifesto plan. This measure alone, will inject some $4.5 billion into the pockets of thousands of pensioners annually.

Similarly, the public assistance is proposed to increase from $19,000 to $22,000, placing an additional $1.4 billion into the hands of persons living with disabilities.

In keeping with its manifesto commitment, the Because We Care cash grant will be increased to $50,000, benefitting over 200,000 school-age children from both private and public schools.

With the $5,000 uniform support, families will now be receiving $55,000 in government support, to ensure the educational needs of their children are met.

Importantly, a $10,000 universal health voucher will be provided to every Guyanese, ensuring they live a healthy lifestyle by regular health check-ups.

To support mothers with newborn babies, a one-off cash grant of $100,000 will be provided, placing an annual sum of 1.3B in disposable income to families.

Starting in 2025, either a mother or father can claim an extra $10,000 tax deduction each month for every child. This means they will pay less in income tax, which leaves them with more money to spend on other things.

COST OF LIVING

To ease the brunt of the high cost of living, the government has earmarked a massive $9 billion for targeted interventions to support Guyanese.

According to Dr Singh, this intervention arose from extensive consultations with the relevant stakeholders, leading up the preparation of the fiscal plan.

OTHER MEASURES

With effect from January 1, 2025, the income tax threshold will be increased to $130,000 monthly, placing an additional $8.5 billion in disposable income for workers; this measure will see 22,000 persons being removed from the tax paying bracket.

Further, the Pay As You Earn (PAYE) Tax Return will also be reduced from 28 per cent to 25 per cent, ensuring workers carry home more of their earning.

Those individuals elible for NIS pension, but did not meet the required contributions will receive much-need support, with $10 billion earmarked in the national budget.

Meanwhile, the part-time jobs initiative will be extended further, providing immediate income to households and individuals, costing the state some $11 billion. This initiative will encourage participants to develop relevant skills for potential transition into full-tine employment.

SUPPORT FOR AGRICULTURE

In order to foster growth in the agriculture sector, the finance minister announced the removal of valued-added tax (VAT) on agricultural machinery and backup generators. These include a wide range of equipment that are critical for farming, costing the state over $1 billion annually.

A new tax politicy targeting poultry farmers was also introduced. The finance minister explained that poultry farmers will now benefit from a shortened depreciation period for capital assets, including machinery and equipment that are used in the production process.

VAT will also be removed on electricity generators, providing relief for business owners and costing over $200 million.

FREE UNIVERSITY

Notably, the minister announced that to support the government’s free tertiary education initiative in 2025, a massive $13.1 billion has been earmarked to finance the operations of the University of Guyana.

“This will benefit in excess of 11,000 current students (at UG) and all new students,” Dr. Singh said.

NATIONAL CASH GRANT

To continue the distribution of the $100,000 cash grant, a further $30 billion is earmarked in the national fiscal framework. When the exercise is completed, a mammoth $60 billion in disposable income would have been placed into the pockets of Guyanese.

ADJUSTMENTS TO TAXES

In a further commitment to improving workers economic well-being, the government has announced plans to remove taxes on persons who earn overtime for work beyond their normal working hours.

According to the finance minister, the first $50,000 of a persons’ monthly overtime, would be non-taxable. This will cost the government on an annual basis, over $600 million.

In addition, for those who have a second job, apart from their full-time job, their first $50,000 of their earned monthly income, would not be taxed.

The finance minister also reiterated the government’s commitment to slashing electricity costs by 50 per cent, once the landmark gas-to-energy project is completed and operationalized.

Importantly, bridge tolls will be abolished at the new Demerara River Bridge, and the Berbice and Wismar-Mckenzie bridges, when construction is completed and open to traffic.

Meanwhile, Dr Singh announced that the government will maintain the removal of excise tax on petroleum products, at an estimated annual cost of over $90 billion. It will also maintain freight cost reduction for a further 12-month period, costing over $6 billion annually.

These measures, excluding the removal of excise tax on fuel and the freight cost reduction, amounts to a mammoth $90 billion, demonstrating the government’s unwavering commitment to easing the financial burdens of Guyana.