Jordan cites Caricom’s Tariff as reason for tax waiver removal

…says Govt willing to approach COTED for exemptions

Finance Minister Winston Jordan has outlined that the recent decision by the Guyana Revenue Authority (GRA) to remove the tax waiver on manufacturing imports, which was being used by local manufacturers is in keeping with the Caribbean Community’s Common External Tariff (CET).

According to Jordan the CET was established under the Treaty of Chaguaramas and is being implemented in other Caricom countries. As such he noted: “The fact that we had been delinquent in the payment doesn’t mean that it is right to continue.”

The finance minister expounded: “It is not a local tax; it is under the Treaty of Chaguaramas and is required for all members of Caricom. We just can’t sit and cry over something that is not a government imposition and should have happened before.”

“It is a local manufacturer who drew it to our attention and once that became known we couldn’t just ignore it because we don’t know what would have been the subsequent consequences of having been told and us not acting on it. They could have complained further. They could have complained to Caricom because they themselves were being affected by the particular act,” Minister Jordan explained.

Referencing the Suriname Rudisa Beverage Company case of 2012, the Finance Minister stated: “You know the last time we failed to enforce the law or treat people equally; it cost us about $1.5 billion. If you remember the Rudisa case, we also have, I believe, a case outstanding with the Trinidad Cement Limited (TCL) where we failed to impose the CET for cement that came, extraregionally some years ago, and TCL took us to court.”

The minister said on the Government Information News Agency (GINA) that while government cannot arbitrarily grant relief from the CET, it has met with the Guyana Manufacturers’ and Services Association (GMSA) and indicated its readiness to approach the Council for Trade and Economic Development (COTED) for exemptions on raw materials for local manufacturers.

He noted further that a list of raw materials has been requested from the GMSA, which upon submission, will be forwarded to the Ministry of Finance for representation to be made to Caricom for relief to be granted by COTED.

The point man on finance expressed government’s willingness to explore other ways through which the local manufacturing industry may receive relief from the effects of the taxes being imposed: “Let’s knock our heads together and see perhaps where relief can be given in another area. The government is not averse in looking at any suggestion in that area.”

Local manufacturers have complained about government’s decision to implement taxes on imported raw materials. In fact, the GMSA through its President Eon Caesar had even agreed to take the lead in suspending the previously unimplemented import taxes.

Caesar had said: “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 further: “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.”

Opposition leader of the People’s Progressive Party/Civic (PPP/C), Bharat Jagdeo had also condemned the move by government, calling for an immediate reversal of what he termed “anti-manufacturing policy.”

“The Government has gone completely insane,” Jagdeo declared in a statement. He posited that this was a desperate measure to bolster dwindling tax revenues.

“Rather than address the core reasons for the revenue shortfall, which is the precipitous drop in economic activities in the country and the ineptitude in defining a way forward, the government has resorted to targeting the productive sectors of our economy,” he said.

The former President asserted that government appeared to be ill-advised on policy matters: “[The change] … will have dire consequences for those companies and may result in the closure of some of them and the loss of thousands of jobs.”