The Guyana Revenue Authority (GRA) has managed to collect close to $1.2 billion in environmental taxes as of the end of last year, ever since its implementation on February 1, 2017.
This is according to GRA Commissioner General Godfrey Statia, who told Guyana Times on Tuesday that companies were generally compliant with this relatively new tax.
“Companies are compliant because we actually have officers going in and do the inventory and for importation they would have paid their environmental taxes of course,” he explained.
While noting the purpose of this special tax, Statia said since its implementation, it has also shown some progress in recycling and re-exports of bottles, something that 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”.
“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 from February 1, 2017 by the GRA. A fee of $10 per bottle on non-returnable containers is now 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 will be liable upon summary conviction to a fine of $50,000, together with a sum of twice the amount of the levy payable.
According to the explanatory memorandum, the environmental levy will be charged per unit on non-returnable containers of any beverage.
Under the previous Administration in the year 2013, the Opposition (now the Government) was opposed to a $5 levy for importers and local manufacturers of beverages in non-biodegradable containers.
But many of the then Opposition Members of Parliament (MPs) who argued against the $5 levy for importers of bottles harmful to the environment threw their support behind the imposition of the $10 fee for all categories of bottles.
Opposition MP Anil Nandlall had raised concerns that these charges were imposed without any prior consultation with stakeholders, particularly businessmen.
In May last year, the Caribbean Court of Justice (CCJ) ordered the Guyana Government to refund Trinidad-based beverage company SM Jaleel (SMJ) and its subsidiary in Guyana, the environmental tax imposed between 2011 and 2015 which can amount to millions of dollars.
CCJ President, Sir Dennis Byron had ruled that the taxes levied during this period were in violation of the Caricom Single Market and Economy rules.
In handing down the ruling, Sir Dennis stated that Guyana has been clearly unjustly “enriched” at the expense of SMJ and Guyana Beverages Inc (GBI), having collected an unlawful tax directly from them in clear breach of the Revised Treaty of Chaguaramas.
Additionally, Guyana will also have to pay an aggregate sum paid by the company to the Government in environmental tax from March 7, 2011 to August 7, 2015, together with interest at four per cent per annum from the date of judgment.
According to Sir Dennis, the environmental tax did not promote cross-border trade but tended to frustrate free movement of goods, distorted competition and discriminated against the companies which should have been protected as belonging to the Community.
Additionally, Guyana was ordered to pay 70 per cent of the cost of the court proceedings.