Businesses caught unscrupulously hiking prices on VAT-exempt products

…GRA will go after them – Govt

Finance Minister Dr Ashni Singh on Wednesday took a hard line against businesses who have jacked up their prices for basic commodities that were supposed to be exempted from Value Added Tax (VAT). According to him, the Guyana Revenue Authority (GRA) has been given full authority to deal with such businesses.

Businesses are being warned to desist from raising prices on VAT-exempt products

For some time now, consumers have complained that the prices of basic commodities have been increasing. On the sidelines of an event on Wednesday, the Finance Minister noted that this is down to the actions of some unscrupulous businesses.
“There are a number of factors that influence prices. One, of course, is taxation. And we, as you know, took off the VAT and reduced taxation on a number of items. In some cases, we’ve seen some adjustments, in other cases we’ve not seen the level of adjustment in prices that we need (to see).
“We don’t operate in an environment of price control. As you know, a long time ago we liberalised markets in the post-1992 period. We don’t have price controls, or dictate what prices things should sell (at). What has happened is that some unscrupulous businesses, even if they take off the VAT, have carried up their prices to compensate for the VAT. That is an extremely unprincipled thing to do.”
According to Dr Singh, the Guyana Revenue Authority has been instructed to ensure that businesses comply with the Government’s tax measures. He also urged members of the public and the media to call out businesses that are guilty of arbitrarily increasing their prices.
“I’ve said explicitly to the GRA that they are expected to enforce the removal of the VAT on all the items that are now zero-rated. So, none of these companies should be charging VAT on any of the items that are zero-rated. It is against the law to do so, and the GRA has been instructed to enforce this provision.
“Where you have real cases, examples that you can give, I think you should call them out for it. Because the objective of removing VAT was not to give any business an opportunity to carry up their prices. The objective of removing the VAT was to pass on the benefit to consumers. So, if you have concrete examples, call them out on it.”
According to Dr Singh, the Government has meanwhile been engaging the umbrella bodies of the Private Sector in the hope of bringing an end to this problem. Efforts by this publication to contact the Georgetown Chamber of Commerce and Industry President Timothy Tucker and Private Sector Commission Chairman Nicholas Boyer were futile.
Back in February, Singh had announced a number of tax measures for budget 2021 that were designed to bring relief to consumers. This had included restoring the zero-rated status of food items and basic household commodities.
The PPP/C Government presented the $383.1 billion 2021 budget, themed “A Path to Recovery, Economic Dynamism and Resilience”, without the introduction of any new taxes. On the contrary, the sweeping relief measures saw the removal of VAT from a slew of food items and household necessities in order to alleviate the burden on taxpayers.
According to Dr Singh during his budget presentation, Government would restore the zero-rated status on all of the food items and other basic household necessities that were previously zero-rated in 2015 before the last PPP/C regime demitted office. These items include basic wheaten flour, basic breads, oats, unflavoured cracker biscuits, cooking oil, locally produced bed sheets and pillowcases, toothbrushes, etc. This, he noted, is in fulfilment of another one of the PPP/C’s manifesto promises.
The Finance Minister had also announced the removal of VAT on data for residential and individual use, in keeping with the Government’s efforts to increase the provision of Information Communication Technology (ICT) across all sectors and regions of Guyana as a means of economic and social empowerment of Guyanese.
The Finance Minister had used the occasion to further remind of his Administration’s swift liberalisation of the telecommunications sector and the ensuing benefits that competition has brought through lower prices and a push to improve services delivered on the initial step of the PPP/C’s promise and vision for enhanced ICT services.