Mar 20, 2016 News
The ad hoc system which allowed investors to benefit from open-ended concessions will soon be a thing of the past, says Finance Minister, Winston Jordan.
The politician said that the scheme is one which is no longer sustainable and as such, a much more beneficial and legal policy will be in place. He said that moves are already being made in this regard.
“For the foreseeable future, we will have to use an incentive regime to attract and encourage investors but we will have to use a regime that is more sustainable.”
The Finance Minister added, “What was done before was that concessions were given out in an uncontrolled manner. You would see in some cases that concessions given to certain firms or persons were open-ended and worse yet, not monitored.”
The Member of Parliament said that his Ministry is hoping to define the manner in which the concessions are granted, while pushing to have the Guyana Revenue Authority (GRA), monitor the concessions better in a much more effective way.
He said, “In fact, investors or businesses are supposed to file annual returns with the GRA and this has not been done in almost every instance…so we need to move swiftly because not to do so is an illegal act. It also means that the relevant agencies are not doing their job.”
The Finance Minister emphasized the point that concessions must be capped. Asked if this will affect the exorbitant concession deals granted under the previous regime to certain companies, Jordan said, “Any new system will change the way things are.”
He added, “I don’t want to be unfair but there are laws and if they are not followed then the relevant agencies must move to enforce the laws or and retract the concessions granted.”
The ad hoc system in which concessions were granted under the previous regime was heavily criticized by the coalition party on the 2015 election campaign trail.
These criticisms were brought to the front burner when the PPP struck a handsome concession deal with a local contractor to repair the fibre optic cable from Lethem to Georgetown. This was part of the E-Governance initiative launched under the previous Government.
That contract was signed by former Cabinet Secretary, Dr. Roger Luncheon and Faisal Mohamed of Dax Contracting Services with the latter party receiving billions of dollars in concessions.
Apart from the magnitude of the tax concessions granted, what was a serious matter of concern to the APNU+AFC party was the fact that the contract said nothing about penalties to be effected if Dax did not follow through with the obligations of the arrangement to repair and maintain the Brazil to Guyana fibre optic cable.
The contract lacked a termination clause and even a time for completion. But when the coalition party assumed office, it brought an end to this arrangement.
Additionally, the APNU+AFC spoke out against the controversial Marriott Hotel which has been the recipient of extravagant tax holidays and tax breaks similar to Dax.
Given the aforementioned “concession-trend”, the APNU+AFC party had concluded that the People’s Progressive Party/ Civic (PPP/C) granted concessions in three packages— Gold, Silver and Bronze.
Junior Finance Minister, Jaipaul Sharma, had said that the gold package is the first-class tax concessions that the former Government granted through the former Finance Minister, Dr. Ashni Singh, to its family and best friends.
The silver package was for party members and the bronze package represents the tax concessions that were given to its supporters.
Sharma, an accountant, had said that he was disgusted at the manner in which the then PPP Government discriminates when it comes to investments.
He added, “The thing that is most despicable about this (former) administration is that in no sector or no area can you find it operating with an ounce of decency or transparency and accountability.”
(By Kiana Wilburg)
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