The Guyana Manufacturing & Services Association (GMSA) has expressed its approval of the new initiatives introduced in the 2025 National Budget, which it said are set to deliver significant benefits to both businesses and employees. These measures, GMSA said, reflect government’s ongoing commitment to addressing critical needs within the manufacturing and services sectors.
The manufacturing sector grew by 13.5% in 2024, largely driven by ‘other manufacturing,’ marking a shift from traditional industries like rice and sugar to a broader base that includes non-metallic products, fabricated metals, beverages, and processed foods. Similarly, the services sector, a cornerstone of Guyana’s GDP, grew by 7.4% in 2024, underlining its essential role in supporting the manufacturing industry and driving overall economic progress.
While the GMSA acknowledges the positive steps outlined in the budget, it stay clear from addressing the potential risks posed by the Dutch Disease, a phenomenon where an overreliance on a booming sector, such as oil and gas, can result in the decline of other sectors, including manufacturing.
Guyana’s burgeoning oil industry has contributed to rapid economic growth, but it also places pressure on non-oil sectors, particularly in terms of currency appreciation and inflation. It is crucial that policy efforts continue to diversify the economy and ensure that the manufacturing and services sectors remain competitive and resilient amidst the oil boom.
GMSA has outlined key highlights from Budget 2025 that is said will notably benefit the private sector:
- Labour, People, and Quality of Life:
- Income Tax Adjustments: The increase in the income tax threshold to $130,000 per month and the reduction in personal income tax rates from 28% to 25% and 40% to 35% will provide essential financial relief to workers, giving them more disposable income.
- Tax Relief on Overtime Income: A non-taxable allowance of up to $50,000 for overtime work and second jobs is a welcomed measure that incentivizes workers to increase their earnings. This will ease labor shortages and help meet growing demands in both the manufacturing and services sectors. The GMSA said it has long advocated for these measures and is pleased to see them enacted.
- Free University and Technical & Vocational Education: The restoration of the constitutional right to free education from nursery to university. This was taken away by the People’s Progressive Party (PPP) government in 1994. Repeated demands for the restoration of the right, particularly in an oil-rich economy has forced the government to capitulate.
Article 27 (1) of the Constitution expressly states “Every citizen has the right to free education from nursery to university as well as at non-formal places where opportunities are provided for education and training.”
GMSA said free university education and technical training aligns with its vision of creating a skilled workforce and advocated for a stronger focus on STEM (Science, Technology, Engineering, and Mathematics) and TVET (Technical and Vocational Education and Training), which are crucial for the country’s long-term development.
2. Energy Interventions:
- Gas-to-Energy (GtE) Project: The development of an additional power plant under the GtE initiative promises to provide affordable and reliable energy for businesses and consumers. This project is key to unlocking the full potential of the manufacturing sector, the association said. Guyana has borrowed US$527 million from U.S EXIM Bank and has to repay a whopping US$316.2M in interest
Removal of VAT on Backup Generators: The removal of VAT on backup generators provides immediate relief to small businesses struggling with inconsistent electricity supply, supporting their operations, GMSA shared.
3. Agro-Processing:The GMSA’s advocacy for measures to support agro-processing has borne fruit in Budget 2025:
- Removal of VAT on Agricultural Machinery: GMSA said this lower costs for the agro-processing sector and encourage investment in çağdaş equipment, boosting productivity and efficiency.
- Removal of VAT on Automated Poultry Pens and Veterinary Supplies: This measure will support the poultry industry by improving efficiency, addressing livestock health challenges, and increasing local production while reducing dependency on imports, GMSA believes
GMSA’s Vision for Ongoing Growth:
The GMSA said it remains committed to working with the government on policies that will further strengthen the manufacturing sector. Looking ahead, the association hopes to see additional initiatives, including:
- Expansion of the Zero-Rated List: The GMSA proposes adding more locally produced products, such as chowmein and vermicelli, to the zero-rated list. This would boost domestic consumption and support local manufacturers.
- Corporate Tax Adjustments: The GMSA urges the government to consider reducing corporate tax rates to improve the competitiveness of Guyanese businesses.
- SME Support for Market Development: Allocating a dedicated budget to support SMEs in market development and international exhibitions would help local businesses expand their reach and access küresel markets, the association advised.
The GMSA says it looks forward to continued collaboration with the government to ensure policies remain supportive of the manufacturing and services sectors, keeping Guyana’s private sector competitive, resilient, and ready for future success.