GMSA lauds Govt for $4.8B reduction in shipping taxes

…benefits to trickle down to consumers – FITUG

The Guyana Manufacturing and Services Association (GMSA) has joined in lauding the People’s Progressive Party (PPP) Government for the reductions that were announced to duty and tax rates, reverting them back to pre-pandemic levels.
In a statement on Tuesday, the Association noted that a number of factors including COVID-19, have had a debilitating effect on the economy. This includes the imbalance of supply and demand for maritime services, which has led to exorbitant increases in transportation costs that further threaten Guyana’s manufacturing, services, commerce and trade activities.

“The GMSA therefore commends the Government of Guyana and His Excellency, President Dr Irfaan Ali, on the timely decision to reduce the adverse impact of increased freight costs on Customs Duties, Excise Taxes and Input VAT calculations, by reverting to pre-pandemic estimates.”
“With the impending amendment of the Customs and Value Added Tax (VAT) Acts to reflect this essential concession, the GMSA is confident that the Manufacturing Sector in particular, will be regenerated to a more competitive position for regional and international trade, with an exponential increase in exports,” GMSA also said.
According to GMSA, the removal of VAT on the various commodities that are necessary for production and exports, demonstrates the Government’s commitment to sustainable development and the growth of local businesses and the economy.
“These benefits encouraged more upstream manufacturing, and assisted companies to remain operational, despite the challenges over the past year. Further to the Government’s assurance of monitoring the cost of goods and services, the GMSA intends to work with its members to ensure that all cost-saving measures are transferred to the relevant sectors under its purview and by extension, consumers,” GMSA said, reminding that the effects are in effect from August 1 to January 31, 2022.

FITUG
Meanwhile, the Federation of Independent Trade Unions of Guyana (FITUG) released a statement of its own in which it acknowledged that this latest measure by the Government is aimed at reducing the cost of living. According to FITUG, the cost of important and essential commodities has taken a steep hike in the past few months.

“We recognise that, to some extent, those increases are linked to events outside of Guyana, more particularly regarding freight costs. At the same time, it is not lost on us that some businesses have sort to profiteer from the situation.”
“Such unscrupulousness and we daresay fleecing of our hard-working and unwitting Guyanese should not be countenanced more so given the challenges of our contemporary times. We recognize that the through the decision of the Government, nearly $5B in revenues will be foregone,” the Union said.
According to the Union, it is expected that these savings will directly benefit the Guyanese people. This, they said, includes the decline of mounting prices over the next few days and weeks, while workers’ wages and salaries will be able to have more value.
“Undoubtedly, such expectations we do not believe are farfetched nor outlandish. The Federation also looks in the coming weeks to a continued monitoring of the situation to ensure that workers and all Guyanese are benefitting from the Government’s initiatives.”
“The FITUG believes too that some examination of the fuel prices should be examined to further reduce the cost-of-living. We urge too that other, more direct measures be considered in an effort to offering further reliefs to our beleaguered working people and their families,” FITUG said.
The Union also noted that in light of the President’s recent announcement of pay rises to all public employees, the time has arrived to consider the long outstanding increase in the national minimum wage. According to FITUG, this is likely to go a long way to assist hard-pressed workers.
With the aim of cushioning the high shipping costs due to the global pandemic, a statement from the Office of the President had on Monday announced several reductions to shipping-related charges to the tune of $4.8 billion in order to bring relief to citizens and businesses.
“In this regard, we have recognised the marked increase in shipping costs from some countries which has moved from an average of 2500 to as much as 15,000 US dollars per 20-foot container and from 3500 to over 20,000 USD for a 40-foot container.”
“Duties, Excise Tax and Input VAT are calculated utilising the cost, insurance and freight of imports, thereby allowing for the increased cost of freight to be passed on to the consumer by the importer,” the statement said.
According to the Office of the President statement, in light of this the President has instructed that further reliefs be granted and the freight charges be reduced to pre-pandemic levels when calculating Custom Duties, Excise Taxes and Input Value Added Tax (VAT) on imported goods. (G3)