…as Private Sector cries: “What we don’t want is an overtaxed sector”
The Guyana Revenue Authority (GRA) has not been privy to any planned reduction in the rate of Value Added Tax when the Budget for 2018 is presented in six weeks’ time.
The bombshell was dropped on Thursday, the final day of ‘Business Summit 2017’, when GRA Commissioner-General Godfrey Statia formed part of a fiery discussion panel on ‘Taxation in Guyana’ and was joined by vocal social activist and Chartered Accountant Christopher Ram, the Inter-American Development Bank’s (IDB’s) Mark Wenner, Opposition Member of Parliament Anil Nandlall, and Private Sector Representative Deodat Indar.
Statia is in fact advocating a reduction in the personal income taxes paid by workers—a measure that can in fact alleviate the inherent loss of disposable income, a result of previous increases in other taxes paid.
The panel discussion followed a presentation by People’s Progressive Party Civic (PPP/C) Chief Whip Gail Teixeira, who had lamented the more than $10 billion taken out of the pockets of the average Guyanese as a result of the 2017 Budget taxation measures.
The Commissioner-General, during his time in the spotlight and under interrogation from participants of the Guyana Business Summit 2017, was quick to point out that he was in no way a policy representative of the Government, but was at the summit as a technocrat.
During his exchange on the panel discussion, he also criticized its content, saying he had attend the forum under the impression that “it would have been an intellectual discourse on how we go about” solving the problems that exist within the system.
According to the Commissioner-General, two-thirds of the way into the allotted time for ‘taxation,’ the discussions were yet to centre on the ‘meat of the matter.’
Lambasting the forum, the Commissioner General said the administration and its related agency must first be apprised of the tax-related woes that impede the Private Sector in order to be able to formulate a plan to address them. He reminded those in attendance at the Marriott Hotel that “there is no quick fix.”
Turning his attention to the ever-controversial application of the Value Added Tax (VAT), the Commissioner General told participants, inclusive of business leaders and elected representatives, “As far as I have been told, there has not been any further consideration in reduction of VAT.”
Statia’s comments were not contradicted by Minister within the Finance Ministry, Jaipaul Sharma, and came a short time after Teixeira had told the Business Forum of an Opposition proposal for the rate to be reduced to 12 per cent—initially promised by the Coalition Administration.
Responding to the various aspersions cast as a result of the imposition of a range of new tax measures in the 2016 and 2017 budgets — which has led to the annual erosion of some $10 billion in disposable income — Statia said he would have preferred to see a reduction in the income taxes paid.
The Commissioner-General told those in attendance that the benefits the administration was looking to see passed on with its reapplication of VAT on a range of commodities did not filter down to the ordinary man.
“I would have preferred a decrease in personal taxation, and let the increased disposable income cover that (shortfalls)… There is a mixture of things to be done,” Statia cautioned, as ideas were bandied on which of the several taxes charged should be reduced.
IDB Representative on the panel, Dave Wenner, had used his time to lament that Guyana is listed—tied with Haiti—as having the highest business taxes.
The fiery discussion panel came subsequent to a presentation to the Business Summit by PPP General Secretary Gail Teixeira—on behalf of Opposition Leader Bharrat Jagdeo—who updated the Summit on some 124 proposals that the political Opposition has submitted to Parliament for inclusion in the 2018 Budget.
The proposals by the political Opposition indicated to the Business Summit that the Opposition was looking to have Government, through its parliamentary motion, ‘restore the purchasing power of the people by removing the imposition of VAT on zero-rated items, new fees and licences imposed in the 2016 and 2017 Budgets.
The PPP, she said, is looking to have Government immediately remove all forms of taxes and duties on fuel for the agriculture industry; on inputs for the agriculture industry, including machinery, equipment and spares; in addition to removing the burdensome GRA administrative measures put in place.
The interactive panel discussion also saw heated exchanges between panelists and participants.
Local entrepreneur Captain Gerry Gouveia, present for both days of the historic confab, was against insinuations that the private sector was somehow operating in a predatory manner, like vultures, and wanted to pay less taxes in order to use the larger profits for their own purposes.
Captain Gouveia, in defending the private sector, said he took offence to the insinuations and that which suggested that the private sector didn’t in fact want to pay “its fair share.”
Gouveia was adamant: “What we don’t want is an overtaxed sector.”
In February of this year, Government had said it will be moving to further reduce the current 14 per cent taxation come next year.
“The general approach of the Government is to progressively reduce value added tax. This year, as you know, we had some challenges and rising of the revenues had to be done, (but) I’m very confident in the next budget, we will a reduction in that tax,” President Granger told reporters during ‘The Public Interest’ programme.