Georgetown, Guyana -- Nov. 20, 2007 -- “We are examining a lot of issues as to how we can improve the lives of people and tackle cost-of-living issues,” were the words of President Bharrat Jagdeo in Berbice recently following Cabinet’s outreach to Region Six (East Berbice/ Corentyne) when he responded to the media as to whether Government was considering raising the income tax threshold which stands at $28,000.

The Head of State said that the cost-of-living issue has become a major problem in the Caribbean along with that of rising prices.            “The whole issue of the threshold is just one measure that we are examining, which I think would bring some relief to people at the bottom,” the President explained.

He noted however, that a figure has not been decided upon yet, but emphasized that Value Added Tax (VAT) is not the reason why prices of commodities in the country have increased.

The President alluded to the rising prices of commodities worldwide and the impact this has been having on several countries, not only Guyana. He attributed the increased prices in Guyana today to three major factors: the rising cost-of-living worldwide, the decreasing value of the United States dollar and the continually increasing prices for oil on the world market.

President Jagdeo alluded to statements made by several countries’ leaders, including recently re-elected Prime Minister of Trinidad and Tobago, Patrick Manning, who have vowed to ensure that they tackle the rising cost-of-living in their respective countries so that it can be reduced.

The Head of State said some wheat- growing countries like the United States have
switched to corn production to suffice for ethanol-production, therefore, the prices of both commodities have increased.

He added that the global situation as it relates to war only compounds the issue as this has much impact on the oil producing countries and therefore, fuel will continue to rise and trickle down on the cost of other commodities.

“Every time the US thinks about invading a country, the price of oil increases,” President Jagdeo said, adding further that this why the ethanol and hydro-power projects in Guyana are being considered.
He said that there has not been a steep increase of prices for fuel in Guyana because Government has been cushioning the effect of the world prices by lowering the excise tax on imported fuel.

In relation to comments by the main Opposition Party (PNC/R) that Government has raked in more VAT than it had planned and consumers are being burdened, the Head of State said that undoubtedly, the VAT has resulted in some price increases but this would have been balanced off with the number of other prices which were reduced. He added that taxes on the commodities were always there, only that consumers were not seeing what they were paying, as they do now.

“They come to these conclusions without even looking at the problems with our neighbours (cost of living problems). The reason we are collecting more is because more people who were evading taxes before, have to pay it now,” the President said. 

Alluding to the increased price for milk and other commodities such as potatoes, the Head of State said that this cannot be as a result of VAT, since these do not attract the VAT but have been steeply increased worldwide.                      

Source: gina.gov.gy