After reporting a 12 month inflation rate of 5.7% recorded in December 2021, which was led by a whopping 11% rise in food prices, the installed People Progressive Party (PPP) has announced that the income tax threshold will be increased by $10,000 per month.
With PAYE tax at 28%, this increase amounts to a measly $2,800 additional take home pay per month to taxpayers. This comes in a year when all savings from oil revenues are scheduled to be extracted from the Natural Resource Fund (NRF) and spent as part of the 2022 central government budget.
Minister within the Office of the President with responsibility for Finance Dr. Ashni Singh made a further projection of inflation in 2022, stating in his Budget presentation, “This year, inflation is forecasted to be 4.1 percent”. This would amount to a cost of living increase of $4,100 for a $100,000 budget.
With such high inflation recorded in 2021, and expected to continue in 2022, there was significant anticipation that oil profits would be used to cushion the blow to the purchasing power of Guyanese in the working class. However, the ruling PPP regime has so far disregarded widespread calls to raise the income tax threshold to $100,000.
With living costs going up by $4,100 per $100,000 and take home pay set to only raise by $2,800 it is clear that working Guyanese will continue to see their purchasing power shrink in 2022 under the PPP.
