Effective January 1, 2025: Major tax relief measures for Guyanese workers:

• Tax Rate Reduction: First band reduced from 28% to 25%, second band from 40% to 35%
• Income Threshold Increase: Personal allowance increased from GY$100,000 to GY$130,000 monthly (GY$1.2M to GY$1.56M annually)
• First Band Threshold: Increased from GY$2.4M to GY$3.12M annually
• New Allowances: Child allowance, second job allowance, overtime allowance, medical insurance deduction

Tax Savings Example: Someone earning GY$400,000/month saves approximately GY$15,000-25,000 annually with new rates.

Personal Allowance (Free Pay): Tax-free income threshold before tax is calculated.

Calculation: Whichever is GREATER:

• Fixed: GY$130,000 per month (GY$1,560,000 annually)
• Proportional: 1/3 of total income from all sources

Example:

• Income GY$360,000/month: 1/3 = GY$120,000 < GY$130,000 → Use GY$130,000
• Income GY$600,000/month: 1/3 = GY$200,000 > GY$130,000 → Use GY$200,000

NIS (National Insurance Scheme): Employee pension/social security contribution.

Rate: 5.6% of gross salary (employer pays 8.4% separately)

Maximum: GY$15,680 per month on insurable earnings up to GY$280,000

Calculation:

NIS = MIN(Gross × 5.6%, GY$280,000 × 5.6%)
NIS = MIN(Gross × 5.6%, GY$15,680)

Note: NIS is deducted from gross salary and is also deductible from chargeable income.

Four New Tax-Free Allowances (2025):

1. Child Allowance: GY$120,000/year (GY$10,000/month per child under 18)

• Proportioned based on actual earnings period
• Both parents cannot claim same child
• Requires child declaration form

2. Second Job Allowance: GY$600,000/year (GY$50,000/month max) for secondary employment

3. Overtime Allowance: GY$600,000/year (GY$50,000/month max) for work beyond normal hours

4. Medical Insurance Deduction: Up to GY$600,000/year or 10% of gross salary (whichever is less)

VAT Calculation: VAT = Amount × Rate

Rates:

• Standard: 14% on most goods & services
• Zero-Rated: 0% on specified items
• Exempt: 0% on certain services (no VAT charged, no refunds)

Zero-Rated Items (0% VAT):

• Export of goods & services
• Medical supplies & equipment
• Raw materials & packaging materials
• Food items & groceries
• Agricultural machinery & equipment
• Backup generators (as of 2025)
• Educational materials

Exempt Supplies (no VAT): Education, residential rent, financial services, transport

PAYE (Pay-As-You-Earn): System where employers withhold income tax from employee salaries.

Process:

1. Employer calculates chargeable income (gross - allowances - NIS)
2. Applies tax rates (25% up to GY$260K/month, 35% on excess)
3. Deducts amount from salary and remits to GRA by 14th of following month

Key Points:

• Monthly PAYE due by 14th of month following payment
• NIS also withheld alongside income tax
• Some allowances (child, second job, overtime) may not be withheld depending on employer

Tax Savings Example (Monthly Income GY$400,000):

• 2024 Tax: ~GY$35,000/month
• 2025 Tax: ~GY$25,000/month
• Monthly Savings: GY$10,000
• Annual Savings: GY$120,000

No: For child allowance eligibility in 2025, both the child and parent must reside in Guyana. The child must be under 18 years old.

No: VAT has zero-rated and exempt categories. Zero-rated (0% VAT) items include exports, medical supplies, food, agricultural machinery. Exempt supplies include education, rental income, and financial services.

Standard calculation: Import duty 45% + Excise 100% + VAT 16% = ~118% total effective rate on vehicle value. Luxury vehicles can face up to 150% import duty, resulting in total effective rates exceeding 200%.

Exports are zero-rated: Exporters registered for VAT can claim refund of VAT paid on inputs used in exported goods. Consult GRA for export registration requirements.