Budget 2025: Private sector wants tax reform on pension contributions, spare parts

Ahead of Friday’s presentation of the 2025 National Budget, the private sector in Guyana has made some recommendations for fiscal improvements including tax reforms in several areas.

These recommendations came following a recent meeting hosted by the Georgetown Chamber of Commerce and Industry (GCCI).

See below statement from GCCI on Budget 2025:

Budget Recommendation for Fiscal Improvement Based on the GCCI Meeting

1. Hybrid Vehicle Duty Taxation

Hybrid vehicles in Guyana currently face an effective duty rate of 69%, compared to the 49% duty rate for petrol vehicles. This system discourages importing environmentally friendly vehicles, counterintuitive to global trends toward greener economies.

Recommendation: Reduce the duty rate on hybrid vehicles to align with or be lower than the rate for petrol vehicles to incentivize the importation of greener cars.

2. Removal of Duties on Spare Parts for Construction and Agricultural Machinery

Spare parts for agricultural and construction machinery are currently subject to import duties. This increases the operational costs for businesses in the agriculture and construction sectors, as they rely heavily on machinery for productivity.

Recommendation: Remove import duties on spare parts for agricultural and construction machinery. This would reduce operational costs and improve the efficiency of these vital sectors.

3. Property Tax Reform

Property taxes in Guyana are levied on properties valued above 40M GYD, a threshold that has not been adjusted in 2019 to match inflation rates, resulting in higher tax burdens on property owners. The tax structure includes a 0.5% rate on properties exceeding this threshold.

Recommendation: Adjust the non-taxable threshold to reflect current property values and inflation rates, reducing the tax burden on property owners.

4. Audit Requirements for Small Businesses

All businesses in Guyana are required to undergo annual audits, regardless of size. This creates challenges for small businesses, which often face delays and increased costs due to the limited availability of auditors.

Recommendation: Introduce a threshold for small businesses, exempting them from mandatory annual audits if they fall below a revenue range, employee, or asset levels.

5. Tax Deductibility for Pension Contributions

Currently, pension contributions are taxable as part of the gross income of employees, which reduces the amount of take-home pay and discourages pension savings.

Recommendation: Make pension contributions a non-taxable deduction, similar to the treatment of medical deductions, up to a specified limit.