It’s VAT and VAT and VAT everywhere!” Opposition Chief Whip Gail Teixeira exclaimed as she moved her motion in the National Assembly calling on Government to repeal the new Value Added Tax (VAT) regime, which comes into effect today (February 1).
The motion, which challenges Government’s decision to eliminate zero-rated VAT items and extend the list of VAT exempt items, had the full support of other
Junior Finance Minister Jaipaul Sharma
Opposition parliamentarians, some of whom contributed to the lengthy debate on the issue.
Teixeira highlighted how almost everything, even down to the dead, would be subjected to VAT, as she called on the Government to put an end to this unnecessary burden on the people of Guyana.
“Not even the dead can live in peace!” she remarked, noting that funeral services, which were previously zero-rated, would now attract VAT.
Teixeira outlined that services in the health sector, the cost for over-the-counter drugs, educational materials, religious books, sports gear, as well as local products, are now attracting 14 per cent VAT – making it even more challenging for the average man to rid himself and his family of poverty.
Teixeira also argued that VAT on basic items such as educational materials, health purchases and sports gear went against promises made by the Government to reduce school drop-outs, to solve the Maths problem facing
Opposition Chief Whip Gail Teixeira
students, to encourage youth from turning to crime and to foster a healthy nation.
She explained if basic items such as erasers and geometry sets now attracted VAT, then it becomes increasingly difficult for struggling families to keep their children in school.
On the other hand, Junior Finance Minister Jaipaul Sharma explained that Government’s new tax regime was to facilitate equal wealth distribution and the Private Sector was to be blamed for the increases passed on to the poor.
Sharma argued that the switch from zero-rated items to exempt should not come at a cost to consumers, but it was the businesses who were taking advantage of the change to exploit the spending public.
“In both cases, where it is zero-rated and exempted, there is no VAT to be put on that bill. You will not be seeing any VAT on that receipt…so this issue of persons paying VAT is a misnomer,” he explained.
He argued that businesses should not be charging consumers VAT if the items are exempt.
“The businesspeople have to be responsible. So you give the onus to the businessman if he want to charge additional cost, but it will not show as VAT… I went around, I was shopping in the supermarket and guess what? The price for commodities increase. What was the explanation for the price increase? I am buying 5 gallon of water and the people increase the water. What is the explanation? VAT is not effective until February 1. The business community is taking advantage of this Administration,” he stated.
Benefits
Further, Sharma said the new VAT regime was aimed at benefiting the Private Sector.
“These measures basically benefit the businesspeople. Just imagine a businessman at the end of every month would have to prepare to submit his VAT returns for refunds. That is more work for the businessman… the businessman don’t have to have a big team of people preparing a list to send to the GRA for VAT refund,” he insisted.
He contended too that this measure would make “life easier” for the GRA staff as they would no longer have to expend time, energy and resources facilitating the VAT refunds.
Sharma also contended that the new VAT regime would benefit the poor.
“The measures that we took here is (for) the benefit of the poor. The poor was crying…they were saying that they were treated like the rich man. So the measures with the VAT are to ensure the rich is treated one way and the poor is being treated another way, a way that is less penalty to them,” he explained. Sharma posited that “the poor man must see that the rich man paying VAT and he is not paying VAT so he gonna feel some way that this government is fair in how they are distributing the income and the wealth. If you want to eat fancy food, you pay the VAT. The poor man don’t eat fancy food,” he reasoned.
