Private Sector needs to pull its “socks up” – David Hinds

The removal of manufacturing tax waivers on the already laden Private Sector has been met with criticism from all ends and although political activist, Dr David Hinds believes the waivers are in order, he stated that it is the Private Sector’s responsibility to pull their “socks up.”

The Executive Member of the Working People’s Alliance in an exclusive interview with Guyana Times stated that while it is important for the local Private Sector to be given incentives, it is their duty to be enterprising and develop their own plan of action for surviving and developing the economy.

“I do agree that you have to give incentives to local Private Sectors, so the tax waivers were in order, but the Private Sector has a responsibility to be enterprising and I don’t think our local Private Sector, as it is constituted really, is as energetic as it should be,” he remarked.

His comments follow petitions from the manufacturing sector to have the regulation lifted. On Thursday, the Guyana Manufacturing and Services Association (GMSA) announced that they will lead the way toward the suspension of the earlier unimplemented import taxes.

Earlier this week, the Guyana Revenue Authority (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 assertion that businesses are becoming too reliant on concessions and are not doing enough to develop their enterprises and resources.

GMSA President, Eon Caesar, stated that the new requirement would bear significant consequence and rocket the costs of items sold by the sector. On the other hand, manufacturers would be required to pay more for raw materials. “This decision has a direct impact on the end users as products and services, which they normally utilise, would become more expensive,” he said.

Moreover this new requirement would create an uneven playing field for local manufacturers since foreign competitors would continue to charge current rates for their products.

However, Hinds suggested that there will always be challenges faced when manufacturing, especially given the state of the economy, but the Private Sector and Government need to come up with a package where all parties can benefit.

“I think a lot of the problems we are having is that we do not sit down as a people. Government with the trade unions, along with the Private Sector and the communities need to sit down and decide how are we going to distribute incentives, how are we going to manage resources, what is the best way to help the manufacturers here? Are they manufacturing things that can be placed on the international market? Are they manufacturing things that will take care of our needs here, so that we don’t have to import?” he asked, insisting that there is a bigger picture than incentives.

“…the Private Sector needs to have its own plan about how it is going to contribute towards building this economy and benefiting its people,” he said.

Entrepreneurs

Comparing Guyana’s Private Sector to Trinidad’s, Hinds indicated that Guyana should broaden its Private Sector by fostering room for more entrepreneurs. He explained that if incentives are given to persons to engage in small businesses then “you would have broadened the Private Sector and you would infuse the Private Sector with novel ideas and break the monopoly of a few business people”.

Nevertheless, he stated that these incentives should be tied to the entrepreneurs taking initiative and developing businesses that will benefit the country.

He argued that it is unfair for foreign investors to be given more concessions than local investors. “If you are going to develop the Private Sector here then you would have to give incentives, encouragement, and develop infrastructure for them. If you are developing infrastructure for foreign businesses, why not develop infrastructure for local investors. There has to be some parity between the benefits and the incentives given to foreign and local investors,” he said.

Hinds posited that Guyana will not just be developed by foreign investors, but more importantly by investments of the locals.

“If the people in Guyana are going to invest to help Guyana, then the authorities need to invest in the people,” he continued, adding that the scales should be balanced.

Currently, the GMSA is engaging the services of the GRA and the Foreign Affairs Ministry to commence the process of applying for a suspension of the import taxes.

“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, “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.”

Subsequently, he added that they are prepared to work closely with all relevant stakeholders, including the GRA and the Foreign Affairs Ministry 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, which has been in existence for over 40 years.