Reinstatement of CET on soap in keeping with CCJ ruling – Finance Minister

…says APNU/AFC disregarded regional court’s 2018 order

Finance Minister Dr Ashni Singh has debunked claims by A Partnership for National Unity /Alliance For Change (APNU/AFC) that the People’s Progressive Party/Civic (PPP/C) Government has unilaterally reimposed a 40 per cent tax on soaps by saying that the move was in keeping with a ruling by the Caribbean Court of Justice (CCJ), which was ignored by the Coalition regime.

Opposition Leader Joseph Harmon on Thursday released a statement criticising the current administration for being “rash” and “unnecessarily” reimposing the 40 per cent Common External Tariff (CET) on various soaps, including hand soaps, following a public notice from the Guyana Revenue Authority (GRA).
According to Harmon, the APNU/AFC Coalition had removed the CET on soaps after the COVID-19 pandemic hit last year in order to make soaps more affordable and accessible to persons.

Official complaint
In response to the Opposition Leader’s statement, Minister Singh reminded that, in 2018, Dominica had filed an official complaint at the Caribbean Community (CARICOM) Council for Trade and Economic Development (COTED) against a number of member States which were applying rates of duty on extra-regional soaps that were less than the prescribed CET rate of 40 per cent.
The Finance Minister noted that Guyana was among those countries, given that it was charging at the time a rate of 20 per cent – something which he said the Coalition has been well aware of, since it was in office at the time.

“COTED ruled on the matter and directed that all such member States which were in violation of the CET should reinstate the 40 per cent. Following the 2018 ruling by COTED, the then APNU/AFC Government started to take steps to implement the reinstatement of the CET, including drafting the required legal instruments. They, however, did not proceed to finalise these…,” he stated.
Dr Singh added that shortly after the onset of COVID-19, the APNU/AFC regime proceeded to lower the rate of duty charged by Guyana from 20 to zero per cent, which further exacerbated the CET violation.
“Worse yet, they did so without invoking emergency procedures through the appropriate COTED channels which might have been used to regularise the matter… Since then, Dominica has continued to pursue the matter bilaterally, and has suffered severe economic consequences as a result of the CET violation,” the Minister pointed out.
It was further noted that Dominica and Guyana share an important trading relationship. Guyana is one of Dominica’s main export markets for soaps, accounting for approximately 42 per cent of Dominica’s exports. In addition, Dominica sources 75 per cent of its total rice imports from Guyana and 32 per cent of its total imports of sugar.
Minister Singh went on to highlight that Guyana’s failure to respect COTED’s 2018 ruling on this matter exposed our country to legal action by Dominica and other regional producers of soap through the Caribbean Court of Justice, and could result in very substantial damages being awarded against Guyana, which would in turn result in a significant cost to the public treasury.
“The APNU/AFC is well aware of the history of this matter, and they had themselves already started to take action to reinstate the CET before they got busy trying to steal the 2020 election. Despite being in full possession of the facts surrounding this matter, they have chosen once again to follow the route of trying to mislead their rapidly dwindling number of supporters with a completely contrived and fanciful misrepresentation of this matter,” the Finance Minister asserted.
Meanwhile, Dr Singh further sought to clarify that no soap imported from Dominica or any other CET member State would be subject to duty. In fact, the reinstated CET applies only to soaps imported from outside the CET region.
“The action taken today is consistent with the current Government’s respect for the rule of law, the CET being a legally binding regional obligation. This action is also consistent with Guyana’s solidarity with our brothers and sisters in Dominica, for whom soap manufacturing is a major industry, a major employer, and a major source of foreign exchange. In exactly the same manner, Guyana would not wish for any other CARICOM member State to violate the CET as it relates to any of the goods we produce and can export to the region,” the Finance Minister stressed.
He added, too, that, “It is indeed ironic, and even comical, that the APNU/AFC would seize on a single item on which the CET is being reinstated in keeping with a regional ruling on the matter, when it was the very APNU/AFC that imposed a vast array of punitive and unconscionable taxes on the people of Guyana, including on electricity, water, medical and educational supplies and services, household necessities, building materials, and heavy equipment for use in the mining and other industries. These punitive taxes have since been removed by the current Government, in line with its pre-election commitment to do so.”