With Government looking to increase its revenue by removing several tax waivers, the manufacturing sector has kicked up a storm on the enforcement of previously unimplemented import taxes on a range of hardware
Members of the GMSA meeting with representatives of the GRA and the Foreign Affairs Ministry on Thursday
and other inputs. In fact, the Guyana Manufacturing and Services Association (GMSA) has even agreed to take the lead in suspending the previously unimplemented import taxes.
This was indicated by president of GMSA Eon Caesar on Thursday during a meeting with members and stakeholders including representatives of the Guyana Revenue Authority (GRA) and the Ministry of Foreign Affairs at the GMSA Headquarters to address the call for the suspension of previously unimplemented import taxes.
Earlier this week, GRA announced that it will be removing the tax waiver on inputs previously enjoyed by the local manufacturing sector. This move is consistent with President David Granger’s announcement in May when he expressed concerns that businesses are becoming too reliant on concessions and not doing enough to develop their enterprises and resources.
However, the GMSA head indicated during the meeting that the association is engaging the services of the GRA and the Ministry of Foreign Affairs to commence the process of applying for a suspension of the import taxes. In fact he pointed out, the presence of the representatives of the two entities was to provide guidance and advice on the actions which can be taken to address the concerns of the GMSA.
“The GMSA is prepared to lead the process for a speedy resolution to the suspension of the import taxes as this situation can have dire consequences for Guyana’s manufacturing, business and economic sectors,’ Caesar stated, adding that, “while this is our short-term approach, the GMSA is prepared to engage with the Ministry of Foreign Affairs, Foreign Trade Department, to achieve the long-term goal of reclassifying items ineligible for import tax exemptions under the revised Treaty of Chaguaramas.”
Moreover, the GMSA president outlined that this move is in fulfilment of the mandate of the GMSA, which advocates for the protection of all its members. In this regard he is prepared to work closely with all relevant stakeholders including the GRA and the Ministry of Foreign Affairs to find a solution to concerns regarding the implementation of the import taxes as well as the revision of the list of raw materials which are ineligible for tax exemptions under the revised Treaty of Chaguaramas and which has been in existence for over 40 years.
“The GMSA members are concerned about the significant consequences which will be faced by manufacturers and their customers should these import taxes be imposed,” the association president stressed.
He went on: “It is imperative that manufacturers, and more importantly the purchasers of products, be cognisant of the fact that this requirement would result in higher prices for products and services. This decision has a direct impact on the end users as products and services which they normally utilise would become more expensive.”
Another impact the sector will face, is that while local manufacturers would be required to pay more for raw materials as a consequence, increase in the costs for their products, foreign competitors can continue to charge current rates for their products. This, he noted, is a significant issue for the local manufacturing sector as foreign competitors would be able to offer products at cheaper prices, creating an uneven playing field.
The GMSA president further stated that the association is highly appreciative of the support of the GRA and the Ministry of Foreign Affairs.
“The fact that both entities have representatives at this very important gathering speaks volumes about the beneficial relationship with the GMSA,” stated Caesar.
The head of GMSA said the representatives of GRA and Ministry of Foreign Affairs provided a wealth of support to the association on this matter and committed to continue working closely with both entities for a speedy resolution.
