
GMSA Welcomes Provisions in 2025 National Budget
Georgetown, Guyana, January 23, 2025: The Guyana Manufacturing & Services Association (GMSA) is pleased to acknowledge the new measures introduced in the 2025 National Budget, which promise to bring substantial benefits to employees and businesses alike. These initiatives reflect the government’s commitment to addressing key concerns within the manufacturing and services sectors. The manufacturing sector saw an expansion of 13.5% in 2024, driven primarily by ‘other manufacturing’. This growth signifies a strategic shift from reliance on traditional manufacturing sectors such as rice and sugar towards a broader manufacturing base such as non-metallic and fabricated metal products, beverages and processed food.
The services sector, which remains a critical pillar of Guyana’s GDP, also experienced notable growth, expanding by 7.4% in 2024. The GMSA recognises that the services sector plays a vital role in providing essential support to the manufacturing industry and driving overall economic growth.
Key Highlights from Budget 2025:
Several key initiatives announced in Budget 2025 are poised to significantly benefit the private sector.
A. 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% are expected to provide much-needed financial relief to the working population, making more disposable income available.
- Tax Relief on Overtime Income: The introduction of a non-taxable allowance for the first $50,000 earned from overtime work and second jobs, will incentivize the earnings of workers who work additional hours and jobs. This will be beneficial to local manufacturers, alleviating labour shortages and meeting the growing demand in both the manufacturing and services industries.
The GMSA advocated for these measures for some time, and we are pleased to see our recommendations implemented.
- Free University and Technical & Vocational Education: With Guyana’s expanding labour market, the government’s commitment to offering free university education and technical training aligns with the GMSA’s vision of ensuring a skilled and educated workforce. The GMSA also advocates for greater emphasis on STEM (Science, Technology, Engineering, and Mathematics) and TVET (Technical and Vocational Education and Training) fields, which include disciplines crucial for the country’s long-term development.
B. Energy Interventions:
- Gas-to-Energy (GtE) Project: The development of an additional power plant under the Gas-to-Energy (GtE) project aims to provide additional and affordable power supply for businesses and consumers. This will catalyse the full potential of the manufacturing sector by providing more affordable and reliable energy for production.
- Removal of VAT on Backup Generators: The removal of VAT on backup generators will offer immediate relief to small businesses struggling with the challenges of the current electricity distribution.
C. Agro-Processing:
The GMSA advocated for several measures aimed at supporting agro-processing, which were included in Budget 2025:
- Removal of VAT on Agricultural Machinery: This will reduce costs for the agro-processing sector, encouraging investment in modern machinery that will improve efficiency and productivity.
- Removal of VAT on Automated Poultry Pens and Veterinary Supplies: This measure will enhance the capacity of the poultry industry by improving efficiency and addressing ongoing challenges in livestock health, thereby boosting local production and reducing dependency on imports.
GMSA’s Vision for Continued Growth
The GMSA is committed to collaborating with the government on policies that will positively impact the manufacturing sector. The association is hopeful that further initiatives will be considered to drive continued growth:
- Expansion of the Zero-Rated List: The GMSA proposes expanding the zero-rated supplies to include more competitive locally made products, such as chowmein and vermicelli, which will stimulate local consumption and support domestic manufacturers.
- Corporate Tax Adjustment: The GMSA urges the government to consider adjustments to corporate tax rates to further enhance the competitiveness of Guyanese businesses.
- SME Support for Market Development: The establishment of a dedicated budget for SMEs in market development and exhibition will help local businesses access international markets and grow their reach.
As the country’s population continues to grow, driven by an influx of foreign nationals, local consumption has increased significantly due to the rising demand from a diverse population. This trend is encouraging for businesses, as it signals demand and new opportunities for growth, fostering a favourable environment for business expansion and profitability.
The GMSA remains committed to collaborating with the government to ensure that policies continue to support the manufacturing and services sectors and that Guyana’s private sector remains competitive, resilient, and poised for success in the years to come.
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Gas-to-Energy project will be a game changer for manufacturing sector- GMSA Head
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Guyana’s manufacturing sector is set to experience significant benefits from the Gas-to-Energy (GTE) project which promises to produce electricity at a lower cost. Ramsay Ali, Head of the Guyana Manufacturing and Services Association (GMSA), expressed this sentiment during a recent episode of the Energy Perspectives Podcast.
The Government of Guyana’s ambitious GTE project will be located at Wales, West Bank Demerara. The project entails bringing approximately 50 million cubic feet of gas from ExxonMobil’s Stabroek Block to two onshore facilities: the Liquefied Natural Gas (LNG) facility and a 300-megawatt power plant. President Irfaan Ali led-administration has repeatedly touted the power plant as one that will slash electricity bills for citizens by 50%.
GMSA’s Head who shares similar views explained that energy costs are often on par with labour expenses for most local companies. He noted that when the GTE project becomes operational, there will be a significant reduction in energy costs for manufacturers in Guyana, making them more competitive.
“Also, if you were to look at say the top 10 manufacturing companies in Guyana…none of us are on the grid; we are all generating from our own suppliers, possibly using generators,” GMSA Head stated. He added, “That itself tells you a story; one, it’s the reliability of power and of course the cost of energy.”
Ali explained that the government’s investment in the GTE project would be a major game changer, not only by reducing the cost of electricity but also by having several positive implications.
“So, let’s start at the top, so most of us in this in this country, are manufacturers here. One of the reasons why we are not so competitive in the export market is the cost of production and one of the reasons why is the cost of energy that has been the story of our lives,” Ali said.
He explained that manufacturers struggle because profit margins are small.
The GMSA Head noted that Trinidad and Tobago companies have always had an edge over Guyanese manufacturers due to their lower energy costs, which are only a third of Guyana’s.
“We do it because we want to expand our business but really and truly, [we] don’t make a significant profit and it’s simply because of the cost of production,” Ali stated. He underscored that a reduction in energy costs and access to high-quality energy would significantly boost Guyanese companies’ export capabilities.
Moreover, smaller manufacturers would also see a reduction in costs. Over the years, the agro-processing business has increased, with most businesses using modern equipment. “They had to lift their game, because there’s no way you could put ketchup in a bottle put a paper label on it. Nobody don’t buy that anymore,” he noted.
Under the GMSA umbrella, there are about 120 small-scale agro-processors. Ali mentioned that most of them state that one of their biggest costs is energy. “So I’m even more excited for the with this project than for larger companies…if they can see a 30% reduction in their cost, that’s going to be amazing,” the GMSA Head stated.
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