The Guyana Revenue Authority (GRA) has reportedly collected close to $1.2 billion in environmental taxes as at the end of 2017, but no specific usage has been earmarked for this new tax, nor has a fund been set up for it to be deposited into.
Finance Minister Winston Jordan
This is according to Finance Minister Winston Jordan, who has said the environmental tax is not an “earmarked tax.”
The minister recently told Guyana Times that even if Government were to collect the entire $1.2 billion of that money, it would be used for various reasons. Jordan said this tax only adds to the total revenue that is collected on an annual basis and used for multiple development projects.
“There is no environmental fund which these taxes are put into and the fund has specific uses. What we have is an environmental tax designed to not destroy the environment and to discourage certain types of consumption. And that money now, since it’s gone into the Consolidated Fund, is in the wash,” he said.
Jordan explained that the $400 million given in subsidies to City Hall could be described as money used towards an environmental cause, but the money did not necessarily come from a specific fund set up to collect the environmental tax and used only for environmental purposes.
“When we have enough money to put into a fund and do specific things in the environment, we will do that,” he explained.
The minister said some people are under the impression that all taxes collected by Government through the GRA are massive sums, but in actuality this does not cater for everything.
He said the country has never had a balanced budget, wherein revenues are just equal to, or greater than, expenditure.
“When I presented the last budget, and I’ll tell you again: despite all the revenue projections we have made for 2018 budget, we still have to borrow a net amount of in excess of $40 billion. So even if we were to collect the $1.2 billion this year — which we are budgeting to collect — until we can improve revenue collection and different sources of financing, and until our expenditure can plateau, we will always have deficit budgets. And to answer (the query): the environmental tax is not an earmarked tax.”
GRA Commissioner General Godfrey Statia told this newspaper recently that since implementation of this tax, some progress has been seen in recycling and re-exporting of bottles, something that had never happened in the past.
The Commissioner General noted also that there has been a substantial reduction in plastic being used by local manufacturers; because “the GRA has a way in which we check the weight and so on,” he explained.
“And there is at least one company other than Banks DIH that recycles their plastic, and we give them a credit for what is recycled. It has been helping in a major way,” he posited.
The new environmental tax was implemented by the GRA with effect from February 1, 2017. A fee of $10 per bottle on non-returnable containers is being charged.
However, even as Government rakes in millions from this tax, environmental analysts are worried that not much is being done to ensure that Guyana’s environment remains pristine. This concern arose since no concrete plan has been outlined by Government on how this money would be used for proper environmental management.
The levy, which accords with amendments to Section 7A (1) of the Customs Act, Chapter 82:01, became applicable to non-returnable units imported, locally manufactured, or produced in Guyana.
The Customs Act provides for the levy to be charged on every non-returnable unit of metal, plastic or glass container of any alcoholic or non-alcoholic beverage or water, whether imported, locally manufactured, or produced in Guyana.
The levy also applies to the said products whether they are imported and not warehoused, or imported and removed from a warehouse, factory, bond or other place of storage.
Exports, on the other hand, are exempt from the environmental levy.
The law outlines that any person who fails to pay the levy would, upon summary conviction, be liable to a fine of $50,000 together with a sum of twice the amount of the levy payable.
