Amid Economic Crisis Suriname's Government Considers Raising Limit on Wage Tax

PARAMARIBO, Suriname – Suriname's government is considering increasing the tax-free limit for workers as Suriname continues to feel the impact of an economic crisis.

President Chandrikapersad SantokhiPresident Chandrikapersad Santokhi, addressing Labour Day activities here on Monday said that his administration wants to increase the purchasing power of citizens even as the economic situation worsens partly as a result of cost-increasing measures taken by the government as part of its structural adjustment program.

In his address, Santokhi said that the government is considering increasing the tax-free limit of SRD7,500 (US$200) and that 80,000 food packages will be distributed to the low-income workers soon.

“I wish to emphasize that the provision of food packages is only a bridging measure. It must be seen in the context of an urgent short-term approach. We intend to move towards a sustainable and structural approach,” Santokhi said, recalling that the government’s recently announced maternity and paternity leave will take effect from May 2.

“The economic problems that we as a country are facing and, in addition, the influence and impact of the global economic crisis, which has not passed us by, unfortunately have consequences for every citizen in our beloved country.

“The negative effects include unemployment and job insecurity, but at the same time also in a shortage of labor in certain sectors. Furthermore, citizens have to deal with declining purchasing power due to the negative developments regarding the exchange rate on the one hand and necessary government cuts on the other,” Santokhi said.

He said the government is aware that these “undesirable negative effects” form a breeding ground for an increase in poverty in the country that is causing uncertainty to grow, especially among the non-working population.

But he said the situation has provided an additional incentive for the government to work to improve the welfare of workers and their families.

Santokhi said in order to take specific measures and develop programs aimed at sustainable poverty reduction, the government updated the poverty line to the level of SRD 5,428 (US$140) for an adult as of March this year.

Partly based on this fact, the general minimum wage has been increased from, 50 to 75 percent amounting to SRD30 per hour.

As of July 1, 2023, a general minimum wage of SRD35 per hour will apply and Santokhi said the government is aware that the minimum wage level is not sufficient, saying this is the level the economy can accommodate.

He said in order to strengthen the purchasing power of wage earners, the sales tax has been abolished this year and wage earners with a taxable income below SRD 7,500 (US$200) per month would be exempt from wage tax.

Santokhi said the process of recovery, and the path to growth and sustainable development, is progressing steadily and that the foundations have already been laid and the government will continue on this path.

He said discussions have been held with various stakeholders on the prevailing socio-economic crisis and that the high cost of living and the decline in purchasing power are among the priority areas.

“We will through dialogue, pay more attention to these points of concern in the various consultative structures such as the Social Economic Council, the Tripartite Consultation, as well as in the various ministerial clusters,” said President Santokhi.

He said dialogue is also taking place with the labor movement in the pursuit of a just society and that in consultation with the social partners, combating poverty and improving the quality of life will continue to be the government’s top priority in the coming months.

Santokhi told the nation that the government’s employment policy will focus on improving productivity, labor skills development and Suriname’s competitive position in the international market.

He said the government has released funds to strengthen community projects where disadvantaged and at-risk youth are given the opportunity to learn a trade to become self-sufficient.

Santokhi said the government has started to implement the third Decent Work Country Program and with technical assistance from the International Labor Organization (ILO), the program has been developed in record time and has made Suriname the only country in the region with a third program.

. An important part of this program is the promotion of entrepreneurship as well as productivity in the labor market that Santokhi said will lead to stronger companies in Suriname and increase employment, improve wages for workers.

He said the aim is to create decent jobs, stimulate investments, promote innovation and contribute to economic growth and prosperity.