Feasibility of VAT reduction to be assessed by IMF

A team comprising experts from the International Monetary Fund (IMF) is due in Guyana next month to assess the Value Added Tax (VAT) and recommendations made by the Tax Reform Committee.
This is according to Finance Minister Winston Jordan, who during an interview with the Government Information Agency (GINA) said, “notwithstanding what the Tax Reform Committee said, and notwithstanding the clamour for the reduction in VAT, I have asked the IMF and they have agreed and the team is to come in August to do an assessment of the Value Added Tax.”
Minister Jordan said after they would have completed their assessment “we will take a look, and we will make a determination what reduction is feasible and when this reduction can take place.”
The Tax Reform Committee, headed by Dr Maurice Odle, was set up late last year and mandated to examine the country’s taxation system and make recommendations for fixing it. Among the recommendations of the Tax Reform Committee were an income tax threshold of 0,000 with progressive rates of taxation from 20 per cent to 35 per cent, reintroduction of estate duties and levies on tobacco and alcohol. Further, the Minister said the Guyana Revenue Authority (GRA) has been approached for its input on the recommended tax reforms.
“What I have caused GRA to do is to go through the report with a fine tooth comb, split it up into the various sections and come up with recommendations of the feasibility of some of what have been recommended so that we could have a discussion in Cabinet and make a determination, whether or not they get into the 2017 budget. The Tax Reform Committee did recommendations that span two years… not just 2017.”
Among the recommendations of the Tax Reform Committee were a reduction of VAT from 16 per cent to 14 per cent, the introduction of an intermediate rate of seven per cent, a reduction of the number of items on the VAT exempt list and a widening of the tax net by reducing the minimum taxable amount from million to million, Minister Jordan said.
Meanwhile President David Granger on an edition of the programme “the Public’s Interest” had said it was perhaps hasty on the part of the then Opposition (APNU+AFC) to promise a reduction on the VAT rate during their first year in office when they had inadequate information on what they would find when they assumed office.