President David Granger disclosed that his Administration is currently reviewing the current tax regime for more possible changes in time for the 2018 National Budget.
He made this disclosure in passing during an interview on his televised programme “The Public Interest”.
The Head of State was at the time responding to the vociferous outcries over the wide range of new taxes included in the 2017 National Budget.
The taxes include 14 per cent Value Added Tax (VAT) on water and electricity
Winston Jordan
charges above certain thresholds as well as a whole range of items, which never previously attracted the tax.
This is also compounded by a number of increases in other fees which many have contended will only reduce the spending power of the population, thus negatively impacting the economy.
But President Granger has an alternative view regarding his Government’s new tax system, contending that he needed to impose taxes to generate money to manage the country.
Taxpayers have also questioned the rationale behind charging VAT on services which are poor and inefficient such as utility services provided by the Guyana Power and Light, Guyana Water Incorporated and GTT to some extent.
Pay for services
However, Granger argued that if people wanted better services, they had to pay for them.
“Nobody likes paying taxes, but no country can survive without taxes. So it is a question of making a choice, some services are poor because it is not supported by a sufficiently broad financial base… If you are to get better services, people have to pay for those services,” he stated.
The President opined that it was not necessarily a “chicken and egg” situation, but the bottom line was if persons have a better country, the tax base needed to be broadened.
“You drive on roads; somebody has to maintain those roads; your children go to school, somebody has to pay to train those teachers…and these services are paid for by the Government…We need to broaden the taxes so it doesn’t fall too heavily on one group of taxpayers,” he explained.
He noted too that Government depended largely on these taxes, indicating that the more received, better the quality of services provided.
“Government, by and large, gets its money though taxations; it works out by paying that tax you get better schools; you get better protection, eg the Police Force or Defence Force; you get better utilities; people are to use ferries and all of these services have to be paid for. That’s how Governments work: we impose taxes to provide services,” he emphasised.
The A Partnership for National Unity/Alliance For Change (APNU/AFC) had campaigned rigorously on the 2015 campaign trail about significantly reducing VAT.
However, Finance Minister Winston Jordan admitted that the promise was unrealistic, with two per cent decrease only coming in 2017.
During a recent press conference, the Finance Minister explained that in hindsight, it was found that it could not have been done within the first 100 days. He said immediately after the APNU/AFC assumed office, it was suggested that this could not have happened.
