Budget 2017: The implementation challenge
Since the presentation of proposed 2017 Budget, there have been both positive and negative statements being expressed. The presentation was timely since a budget should be prepared, presented, approved, and ready to be implemented at the commencement of the fiscal period. In this respect, the government is to be complimented for having a budget ready to be executed on January 1, 2017.
The revenue and expenditure budget is a segment in the government’s financial process. This process commences with the preparation, presentation and approval of the budget; the approval is embodied in the Appropriation Act. Thereafter, there is the execution of the revenue and expenditure recurrent and capital budgets, followed by the accountability function by means of compliance with the checks and balances in the system.
The focus is whether systems are fully in place in 2017 for the execution and accountability of this $250 billion budget.
Let me commence with the 14 per cent Value Added Tax (VAT). The reduction by 2 per cent was long overdue. I am not aware that we have tested systems in place to meet the various VAT requirements, mentioned in the minister’s budget speech.
Secondly, is the staff trained to carry out the present and future VAT requirements? It is my view that urgent intensive and relevant on-the-job training is required, if not, taxpayers will continue to get the ‘royal push around’ at the Guyana Revenue Authority (GRA).
The GRA has a big task in 2017 to carry out the tax requirements in the 2017 Budget. Does it have the required complement of staff to do the various revenue tasks? In my opinion and I am subject to correction, it will need to determine the optimum staffing level required to fulfil the budget mandate if it is currently short of staff.
I will now address the payment of VAT for electricity and water. The delivery of electricity and water as at December 2016 leaves much to be desired. With regard to the Guyana Power and Light (GPL), power outages are a factor. (As I was preparing this article, there was a blackout from 20:40 hrs to 23:05 hrs on Tuesday.) Meters are constantly in short supply and the service to consumers needs to be improved and be timely. The statement that only 20 per cent of GPL’s consumers who pay $10,000 and more monthly will be required to pay VAT, appears to be questionable and should be confirmed by GPL in an audited statement.
On water distribution, the water is yet to be crystal clear and wholesome. Full water pressure through our taps is yet to be provided on a 24/7 basis. In the urban centres, most homes are equipped with pumps in order to boost the water pressure. In many rural areas there is not enough water for daily use. The billing system is yet to be functioning in an acceptable manner since the commencement of the Guyana Water Incorporated (GWI) on May 30, 2002. No statistics were provided on the percentage of those consumers who will be required to pay VAT. Isn’t it readily available?
The issue is that both GPL and GWI should be delivering acceptable quality products and services before asking consumers (who qualify) to pay VAT. I am not stating that VAT should not be charged, but it should be implemented when the quality assurance standards are fully met.
There is need for a review of staff complement at the budget agencies in the public service in order to determine the optimum staffing levels, taking into