The Georgetown Chamber of Commerce & Industry says it remains disappointed that reform of the corporate income tax (CIT) structure was not addressed by the 2003 budget since the corporate tax rate of 45% on commercial companies is "inordinately high by international standards."
The CIT, the Georgetown Chamber notes in a release, "continues to act as a deterrent to greater investment in the commercial sector."
However, on a hopeful note the Chamber says the allocation of $7.2 billion for national security is "deeply reassuring as this serves to alleviate somewhat, the tension and insecurity felt within the business community" as a result of increasing criminal activity.
According to the release, the Chamber expects that the national security issue facing the nation will be further dealt with in such a way that it brings about a rapid return to stability and fosters growth and development in the business sector.
From the body's review of the March 2003 Budget, it "is concerned that a greater stimulus to the growth and development of the business sector was not readily apparent."
The Chamber also notes that the tax reform measures instituted with effect from April 1 are designed to deal with tax evasion, the expansion of the tax net and generating increased revenue.
But the personal income tax (PAYE) needs to be addressed in such a way that there is an acceptable balance between take-home pay and tax revenue paid to the government, the Chamber argues, while noting the increase in the tax threshold from $216,000 per annum to $240,000 per annum. It noted that in its submissions for the 2002 budget it had recommended a tax threshold of $288,000 per annum.
In terms of the consumption tax reform, the Chamber viewed with keen interest the intention to put in place a VAT (value-added tax) system by 2006.
It also points out that the present consumption tax regime continues to "discriminate against imported consumption goods and is applied at varying rates ranging between 10% and 50%." This results in distortion of pricing and perceptions of value by consumers throughout the wholesale, 're-wholesale' and retail pricing channels, the Chamber posits.
And the increase in the withholding tax, the Chamber contends, is a "further disincentive to savings, investment and as yet unrealized bank borrowings at the same time that it acts as a brake on the economy being able to attract and maintain the skilled and professional class of workers."
Further, the Chamber retains a concern over the imposition of a 10% consumption tax on all domestic telephone calls and views the tax as a remitting of the nominal increase in take-home pay realised by moving the tax threshold to $20,000 per month, the release said.