Announcements

Georgetown, Ministry of Finance, March 24, 2021:

Senior Minister in the Office of the President
with Responsibility for Finance Dr. Ashni Singh is sending a stern warning to businesses that should they continue to flout the laws and unscrupulously attach a 14 percent Value Added Tax (VAT) to items on which the VAT has been removed or has been reduced, they will face the full force of the law as this illegal practice is denying consumers the right to ultimately enjoy reduced prices on various commodities including construction materials.

The Minister is reminding the public that when the last 2021 Budget was passed in the National Assembly on March 4, 2021, it would have outlined a number of measures including the VAT zero- rating or reduction of VAT or duty previously charged on a number of commodities.

Consequently, Order Number 6 of 2021 of the Value Added Tax Act Cap.81:05 of the Laws of Guyana came into effect immediately for VAT zero-rating of certain construction materials namely stone imported for construction and housing from Caribbean Community (CARICOM) countries, locally produced pre-stressed concrete piles and locally fabricated mild steel beams for building construction and locally manufactured roofing and PVC products for building construction. Import Duty on Industrial Grade Cement was also reduced from 15 percent to 5 percent.

Additionally, the VAT zero-rate was also restored to basic food items and household necessities that were previously zero-rated up to May 2015 but switched to ‘standard-rate’ or ‘exempt’ over the past five years, e.g., basic wheaten flour, basic breads, oats, unflavoured cracker biscuits, cooking oil, locally produced bed sheets and pillowcases and toothbrushes.

Prior to this, an emergency Budget was also passed in Parliament on September 25, 2020. This Budget also stipulated the VAT zero rate or removal of VAT on other commodities including the overall removal of VAT on electricity and water. Therefore, since then, VAT would have also been removed from hinterland travel and cell phones, as well as building and construction materials.

The Senior Finance Minister recalled that all of these measures were intended to benefit consumers and ease the expense aligned to these previously burdensome tax measures and with their removal or reduction, the expectancy was that it would have ultimately allowed for the reduction in the cost of living of Guyanese generally.

It has come to my attention through various reports from members of the public that a number of hardware stores have since refused to comply and are still unscrupulously charging VAT on several items,” the Minister said.

Dr. Singh added that he is therefore warning such establishments that this illegality will not be tolerated. As such, he pointed out that he has already instructed the relevant agency-the Guyana Revenue Authority (GRA) to ensure that countrywide checks are made to enforce compliance.

The Senior Finance Minister then warned that the businesses found flouting the laws and continuing to deprive consumers and customers of these benefits will be dealt with according to Law.

Finance Minister encourages Baroda to seek out further opportunities to expand

Georgetown, Ministry of Finance, March 17, 2021:

During a simple ceremony today at the Arthur Chung Conference Centre, the Bank of Baroda was designated as a Mortgage Finance Company which will allow the financial institution to also offer home loans to prospective borrowers as well as provide another choice to those considering applying for a loan to construct homes. The event formed yet another aspect of Government’s housing drive and signaled its intention to ensure that its manifesto promise of providing 50,000 house-lots and assistance in providing homes for Guyanese is fulfilled.

Speaking at the event, Minister of Housing and Water Collin Croal welcomed the bank on board as he also encouraged other financial institutions to join in the current development process while noting that investor confidence in the country is at an all-time high.

Minister Croal also spoke of the positive trickle-down effect investment in the sector would have on employment, the business and construction sectors.

Managing Director of the Bank of Baroda, Mr. Arun Kumar Gupta reflected on the Bank’s interest in participating in Government’s housing drive. He also noted that the bank has its historic presence in Guyana dating back to 1966.

Today is a special day for us after being in Guyana for the past 55 years….Bank of Baroda (Guyana) being registered as a Mortgage Finance Company, this is one of our greatest milestones,” Mr. Gupta stated.

While commending Guyana’s Government on their promise of distributing 50,000 house lots within the next five years, the Managing Director said the main reason the Bank joined in the drive was to assist in increasing access to mortgage financing for prospective home owners.

This will not only benefit home owners, but it will also boost the construction sector. Bank of Baroda looks forward to working hand in hand with the Government of Guyana to make its people comfortable homeowners and to continue with the development of the housing sector,” he added.

Meanwhile, Indian High Commissioner to Guyana, His Excellency Dr. K.J. Srinivasa recalled that the Bank of Baroda had recognized Guyana becoming a growth and development story and that India decided that it could not miss the opportunity of playing a role in this process.

The High Commissioner posited that the countries would continue to work on various bilateral projects as he listed a wide range of projects for which his country is working closely with Guyana on implementing. Only recently India donated 80,000 Covid-19 vaccines to this country.

In the meantime, Senior Minister in the Office of the President with responsibility for Finance, Dr. Ashni Singh said the designation of the bank as a Mortgage Finance Company proved to be another important step aimed at improving access to financing by Guyanese households for the purposes of acquiring and/ or constructing their own homes.

These various elements amongst others …form the parts of a comprehensive policy agenda articulated by this People’s Progressive Party/Civic Government with the objective of ensuring that Guyanese families can afford their own homes, can afford to have access to a plot of land, can afford to access the financing for the purposes of constructing their home and can therefore construct and occupy their own home. …we remain convinced that the acquisition of one’s own home is perhaps the single biggest achievement for any family,” the Senior Finance Minister noted.

Minister Singh expressed gratitude to the Bank and to the Indian Government for ensuring that it played a role in Guyana’s development process which will be moving ahead at a rapid pace.

I am pleased that High Commissioner took the time to also speak of the plans that are being rolled out in India with a similar objective to promote home ownership because this serves to demonstrate the universality of recognition given to how important it is for a family to own their own home. This is not something that we whimsically came up with. This is not something that we chose to do by chance …this is a carefully studied position,” the Senior Finance Minister explained as he reminded that there was a time when communities like Eccles, Diamond, Parfait Harmonie, Good Hope, Onderneeming…. ‘did not exist’.

Minister Singh concluded that those communities were a testimony to what can be achieved with ‘the right Government policies along with effort at the personal and individual or household level’ while adding that the financial institutions have played an important part as well.

Alluding to the housing drive events most recently at which Bank of Baroda officials were present, the Senior Finance Minister said, “we are pleased to know that the Bank of Baroda banner was present at those events….the Bank of Baroda has a special place in the Guyanese economic and financial landscape….it came to Guyana before Guyana gained independence and the bank stayed in Guyana throughout all of those years.”

Dr. Singh summed up his remarks by encouraging the bank to ensure that it continued to seek more opportunities to expand and participate in the vast development course being experienced currently in the country.

The Bank of Baroda’s designation as an approved Mortgage Finance Company was done in accordance with Section 15 of the Income Tax Act, Cap. 81:01 of the Laws of Guyana.

Persons can now borrow up to $15M

NBS also announces decreased interest rates

Georgetown, Ministry of Finance, March 10, 2021:

As part of the implementation process of some of the Budget 2021 measures, Senior Minister in the Office of the President with Responsibility for Finance, Dr. Ashni Singh handed over the approval for an increased mortgage ceiling to Chairman of the New Building Society Limited (NBS), Floyd McDonald. With this approval, the mortgage ceiling for the financial institution now moves to $15 Million up from $12 Million, allowing for persons to acquire mortgages up to this higher amount.

The handing over took place during a simple ceremony in the eastern conference room of the Arthur Chung Conference room today in the presence of the media, other officials of the NBS and both Senior and Junior Ministers of the Ministry of Housing and Water.

President Irfaan Ali’s Government has repeated and reiterated, since our assumption of office, our firm conviction that home ownership is perhaps the single most important achievement for almost every family, and that acquiring one’s own home will perhaps for many of us be the single most important investment we would make in our entire lives,” Minister Singh noted.

Minister Singh reiterated, “Our commitment to promoting and facilitating home ownership is because we recognize how important home ownership is to the individual family, but we also recognize how important home ownership and home construction and construction activities are to the economy as a whole…the generation and creation of jobs, the generation of income …the
improvement of livelihoods.”

The Senior Finance Minister, while lauding the NBS for the important part they play in the facilitation of home loans, reminded that the Society has come a long way in terms of their loan offers to the public, recalling that in 1991, NBS granted only 125 new loans while by 2014 the Society had granted 896 new loans, having achieved an all-time high of 1,234 in 2012. Unfortunately, over the past five years, the number of new loans granted annually fell sharply to 400 by 2020. He added that in 1992, the NBS was offering loans at a rate of 18 percent per annum reflecting the state of the economy and the financial sector at the time, but that since then favourable government policies had facilitated a steady reduction of interest rates to the point where today the NBS is able to offer its low income loans at 4 percent.

Meanwhile, Minister of Housing and Water Collin Croal said that the 2021 Budget measures are expected to significantly boost the housing sector.

This signals from Government’s perspective our deep underlying intention of ensuring we bring greater relief to our home owners, potential borrowers but also… walking the walk,” Minister Croal added.

He noted that more persons would be able to access financing for home loans as well as be able to afford to build their homes with more choices available in terms of types of homes to be constructed as he alluded to the other budgetary measures that would assist in this regard, especially the reduction of duty and zero-rating of specific construction material. He posited that with the increase in the loan ceiling, it will not only allow for Government to achieve its overall goal of distributing 50,000 house lots but also encourage home ownership.

Also speaking at the ceremony was Chairman of the NBS Mr. Floyd McDonald who expressed NBS’ pleasure at receiving the approval since as part of its corporate social responsibility, the NBS could now offer further reduced interest rates to borrowers. In this vein, the Chairman announced that NBS will now offer loans up to $6M at a rate of 4 percent per annum reduced from 4.25 %. As regards to loans between $6M to $12M the interest rate will now be 5.95% down from 6.15 and 6.75% while loans above $12M up to $15 M will be offered at a rate of 6.25% per annum.

The Society is indeed appreciative of the improved ceiling approved by Government. We know that our collective efforts will redound to an improved standard of living for Guyanese,” the NBS Chairman added.

On handing over the approval to the NBS Chairman, Minister Singh congratulated NBS on its decision to reduce interest rates for prospective borrowers as well as the remarkable role played by NBS over the years to facilitate home ownership countrywide.

Notes that regulatory process yet to be initiated

Georgetown, Ministry of Finance, March 3, 2021:

In reference to the Press Release sent to the media today by Scotiabank announcing that it had reached an agreement for the sale of its banking operations in Guyana to Regional Bank First Citizens Bank Limited, Senior Minister in the Office of the President with Responsibility for Finance, Dr. Ashni Singh said that the announcement is both premature and inappropriate at this time especially since the regulatory process had not been initiated much less concluded.

“It has been just been brought to my notice that a press release was issued .. announcing a sale of the operations of Scotiabank Guyana to a Regional Bank -a Trinidadian Bank in particular. I wish to say that the Government of Guyana considers it extremely unfortunate that this transaction was announced- bearing in mind that any such transaction is subject to a specified regulatory process. In particular, Section 12 of the Financial Institutions Act stipulates that no financial institution may transfer a whole or a substantial part of its operations in Guyana without the prior approval of the Bank of Guyana,” the Minister said to the media at the Arthur Chung Conference Centre where he had been participating, along with Government and the Opposition, in the examination of Budget 2021 Estimates.

While the bank noted in its Press Release that the transaction supports Scotiabank’s strategic decision to focus on operations across its footprint where it can achieve greater scale and deliver the highest value for customers as well as pointing out that its sale agreement was ‘subject to regulatory approval and customary closing conditions’ Minister Singh stated that ‘Considering that the Laws of Guyana require this process, we consider it premature to announce a transaction of this nature’ adding that it is the intention of the Government of Guyana and Guyana’s financial sector’s regulatory supervisor, the Bank of Guyana, to ensure that the Laws of Guyana are complied with in the fullest and to ensure that appropriate processes of due diligence required under the Laws of
Guyana are initiated and concluded before any such transaction can be proceeded with’.

The Finance Minister reiterated that both Government and the Central Bank remain firmly committed to ensuring the maintenance of a stable, strong vibrant, dynamic and growing financial sector especially during the current period as he reminded that ‘it is important that the financial sector is adequately equipped to meet the needs of our evolving economy which as viewers would know is currently going through dramatic changes’. The Finance Minister further posited that Government’s primary objective remains the preservation of a strong and stable financial sector and one that is dynamic and competitive and that can meet the needs of Guyana’s economy.

Minister Singh also emphasised that Government’s paramount concern is the protection and preservation of the stability of the financial system as a whole and, in particular, safeguarding the interests of depositors and customers of the financial system more broadly.

Prices at Pump to reduce

Georgetown, Ministry of Finance, February 17, 2021:

Senior Minister in the Office of the President with Responsibility for Finance, Dr. Ashni Singh, tonight, announced that Government will be reducing the excise tax on gasoline and diesel to ease the domestic impact of the recent sharp rise in the world market price for fuel.

In announcing the cut in excise taxes, Minister Singh observed that over the past few months, oil prices have risen steadily on the world market, from US$35 a barrel in late October 2020 to over US$60 a barrel at close of trade today. As a result of this steady increase on the world market, fuel prices have also been rising on the domestic market. In order to minimize the impact on domestic consumers, particularly the travelling public as well as those productive sectors for whom fuel is an important input, Minister Singh announced tonight that the Government will be lowering the excise tax rate on both gasoline and diesel from 50 percent to 35 percent with immediate effect.

As a result of the reduction in the excise tax rates, the price at the pump will also be reduced with immediate effect. Specifically, gasoline prices are expected to reduce from $184 per litre to $170 per litre, and diesel prices from $170 per litre to $160 per litre.

Minister Singh explained that, during its previous term in office, the PPP/C Government had put in place arrangements to adjust the excise tax rate on fuel from time to time to cushion the domestic impact of world market price fluctuation, and that the current tax adjustment is being effected using this previously established mechanism.

Minister Singh emphasized that tonight’s adjustments are in keeping with the strong ongoing commitment by President Irfaan Ali’s Government to ensure that domestic customers are protected
from sharp price escalation on the world market and from cost of living increases.

Emphasizes Government’s commitment to ongoing engagement

Georgetown, Ministry of Finance, February 6, 2021:

As work continues on preparation of the 2021 National Budget, Vice President Dr. Bharrat Jagdeo, Senior Minister in the Office of the President with responsibility for Finance Dr. Ashni Singh and Minister of Parliamentary Affairs, Gail Teixeira met with Private Sector and Labour representatives today at the Guyana International Conference Centre (GICC) where discussions were held on the main issues of interests to those stakeholders.

At the engagement, Vice-President Dr. Bharrat Jagdeo emphasized the Government’s commitment to deliver its manifesto promises, several of which have already been initiated in Budget 2020. He indicated that Budget 2021 and the budgets for subsequent years will continue to build on these.

Minister Singh emphasized that the Government’s approach to development is one of continuous engagement. He elaborated that the PPP/C Manifesto has outlined the vision for our country and the key interventions to be implemented, which includes significant investment in physical infrastructure to improve connectivity and unlock economic potential, substantial investment in social services including a well educated and skilled workforce to take advantage of the economic opportunities that are arising. He also added that it is important that the physical transformation is accompanied with improved delivery of quality services both at the level of the Government and the private sector.

Also addressing stakeholders and listening to their concerns and the issues faced by their sectors was Minister of Parliamentary Affairs and Governance Gail Teixeira, who emphasized the government’s consultative and inclusive approach to policymaking as illustrated by this and many other engagements.

The stakeholders present expressed strong appreciation of the opportunity to meet and discuss issues of interest, and advanced several recommendations to the government team for consideration.

Minister Singh thanked the stakeholders for the many valuable suggestions that were made, and noted that many of these suggestions were very closely aligned with priorities previously identified by government.

The meeting saw participation of a wide range of umbrella and sectoral representative bodies, including several from the small business sector.

• Move would regularize inherited liabilities
• Strengthens fiscal management and positions Guyana for economic take-off

Georgetown, Guyana, January 28, 2021:

In a bid to regularize several issues unearthed after assuming office in 2020, as well as to facilitate new financing for a transformative development agenda, government has moved to increase the ceilings for domestic and external debt. Earlier today, the Honourable Dr. Ashni Singh, Senior Minister in the Office of the President with Responsibility for Finance, tabled two orders in Parliament proposing adjustments to the two ceilings. It was proposed that the domestic debt ceiling be increased to $500 billion, almost 3 decades after the last upward revision to $150 billion, in 1994. Additionally, a new external borrowing ceiling of $650 billion was proposed, three decades after its last increase to $400 billion.

The move to increase the domestic debt ceiling was influenced by several factors, one of which is the existence of a large Consolidated Fund overdraft at the Bank of Guyana, accumulated over the last 5 years. Government is now seeking to remedy this situation through the issuance of appropriate instruments. However, if the overdraft were to be addressed under the existing ceiling for domestic debt, a breach would result. In addition, government would require the issuance of new domestic instruments, in future, to finance various policy initiatives, and to stimulate development of the domestic financial market. Meanwhile, the move to increase the external debt ceiling is to accommodate the existing level of external debt contracted, plus anticipated new borrowing to fund government’s development agenda.

Importantly, these revisions to the external and domestic debt ceilings do not threaten Guyana’s long-term debt sustainability, given the substantial economic progress made since the early to mid-1990s (when the ceilings were last revised) and the country’s robust economic outlook. At the time of the last revision in 1991, Guyana’s external debt ceiling was set at more than 1,000 percent of GDP. In contrast, the new proposed external debt ceiling would amount to less than 60 percent of GDP, using the latest 2020 GDP estimates. On the domestic side, when last revised in 1994, Guyana’s domestic debt ceiling was set at almost 200 percent of GDP. In stark contrast, the revised domestic debt ceiling would amount to less than 50 percent of GDP. The above- mentioned comparisons clearly depict that Guyana’s current debt carrying capacity could safely accommodate the proposed ceiling increases.

In sum, this landmark move serves to regularize and accurately reflect significant liabilities accumulated over the last five years and harness Guyana’s debt-carrying capacity to finance government’s transformative development agenda. This latest move is consistent with the incumbent administration’s sterling track record of prudent debt management in the course of safeguarding Guyana’s long-term fiscal and debt sustainability.

Allows for streamlining of budget process for Constitutional Agencies
Ensures Parliament has comprehensive view of Budget in approval process

Georgetown, Ministry of Finance, January 28, 2021

An Amendment to the Fiscal Management and Accountability Act (FMAA) to ensure the streamlining of the budget process in relation to constitutional agencies was today tabled in the National Assembly by Senior Minister in the Office of the President with responsibility for Finance, Dr. Ashni Singh.

The critical piece of legislation cited as the Fiscal Management and Accountability (Amendment) Act 2021 seeks to amend the FMAA Chapter 73:02 to allow for the correction of a number of anomalies relating to the budget process applicable to constitutional agencies. According to the Finance Minister the amendment is necessary as it ‘seeks to streamline the Budget process particularly in relation to constitutional agencies while simultaneously ensuring the preservation of the independence of the agencies’.

Arising from the 2015 amendment to the FMAA by the A Partnership for National Unity/Alliance for Change (APNU/AFC), constitutional agencies’ budgets were required to be sent to the National assembly in advance of the submission of the rest of the National Budget. This two-stage process resulted in a fragmented and inefficient process for consideration of the National Budget and denied the Parliament an opportunity to view and consider the budget in a comprehensive manner.

The proposed amendment is important as well especially with Budget 2021 in its preparation mode and slated for presentation to the National Assembly in February, 2021.