Water rate hike
Ahead of water rate increases, which are set for later this year, the Federation of Independent Trade Unions of Guyana (FITUG) on Monday said that it was disturbed by the hikes as more Guyanese would have to pay Value Added Tax (VAT) on the ultimate commodity.
The umbrella body’s concern follows the recent decision taken by the Public Utilities Commission (PUC) to grant approval to the Guyana Water Inc’s request that would see increased water rates in two parts– the first from October this year and the other in October 2019.
Consumers who are currently paying $60.90 per cubic metre will soon pay $112 per cubic metre. However, with the second increase, the fixed monthly charge will be $500 and the monthly consumption charge $112 per cubic metre. These new charges for metered residential consumers will comprise a fixed monthly charge of $250 and a monthly consumption charge of $86 per cubic metre for consumers in the $60.90 per cubic metre category.
Meanwhile, the new fixed monthly charge for unmetered residential consumers as of this year will be $250, along with a monthly consumption charge of $1100. From October 2019, these charges will be increased to $500 and $1450 respectively. While there will not be any fixed monthly charges for metered pensioners, a consumption charge of $74 will be applied for every cubic metre for the first 10 cubic metres. There will also be an increase to $112 for each cubic metre thereafter. For unmetered pensioners, they will incur no fixed charges while their monthly consumption charge will be a flat fee of $740 per month. Further, there will be no new charges for metered non-residential and unmetered non-residential consumers.
Deeming the increases “saddening”, FITUG reasoned that the water rate hike would now require all consumers to pay VAT on water as they would now exceed the VAT threshold, which stands at $1500 per month. The current VAT rate in Guyana stands at 14 per cent. On Monday, the Union noted that this newest increase came on the heels of several other burdens that have been placed on the workers which could reduce their buying power. It added further that the working-class citizens were reaching the point where the straw would break the camel’s back.
As a pre-condition to applying these new tariffs, the PUC mandated that GWI improve its system and implement a system which would allow pensioners to be added to its database which may require a period of time beyond the GWI-proposed 2018 timeline. Many stakeholders have berated the coalition Government for increasing taxes in various sectors, but the Guyana Revenue Authority (GRA) Head Godfrey Statia views many of these measures as necessary to broaden the tax base.