Fees and penalties associated with the business of alcohol and spirits will now be increased as a result
of the passing of the Intoxicating Liquor Licensing (Amendment) Bill 2016 in the National Assembly yesterday.
According to Minister of Finance Winston Jordan, the fees and penalties related to the industry have not been altered for a long time, in some cases 25 years. During the second and third laying of the Bill, Jordan said that some of the fees have been increased to 100 per cent.
Among the increases is the cost to renew a licence for a hotel, restaurant, members’ club, tavern or spirit shop from $5000 to $10,000. Additionally, anyone who wishes to apply for the issue or renewal of an off-licence shall pay $4,000 instead of $2,000 and from $500 to $2,000 respectively.
Jordan said that he highly doubts the increased fees would cause any disturbance within the liquor industry since based on his observation, despite increased taxes on these beverages, profits still seem to soar.
Opposition member Juan Edghill, said that the increase in fees on business which sell alcoholic beverages will eventually be passed on to the customers who patronise these business places.
Edghill highlighted that the tax is not necessarily on alcohol but on the business of selling alcohol. In that case, he said that even customers who will not buy alcoholic beverages may have to deal with higher costs on other products which they may wish to purchase at the same establishment.
He said that his party’s position to not support the Bill would have been different if it was specifically targeting the curbing of alcohol use and underage drinking.
Edghill said that one of his main concerns is the effect which the increased cost would have on small businesses across Guyana. Further, he said that the government’s main focus with the amendments is to increase the tax on business so as to generate more money.
In his rebuttal, Jordan said that an administrative cost is attached to these fees which drinkers and non-drinkers as taxpayers are paying but not benefitting from, because the fees are well below the cost of administering them.
He added that in many cases businesses paid little or no attention to the old fees and penalties since the fines were of no particular consequence. “It is not to say that these increases will diminish such behaviour in an appreciable manner, but it will point a direction into which we are going.”
He said that the administrative cost must be borne either fully or partially by those seeking licences.
Following the passage of the Intoxicating Liquor Licensing (Amendment) Bill, the House considered and passed the Miscellaneous Licences (Amendment) Bill 2016. With these amendments some of the highest increases will now be implemented. The amendment seeks to increase most of the prescribed fees.
Initially, anyone who fails or neglects, without lawful excuse to take out any licence required under the provisions of any Act for the raising of taxes was charged six dollars and not more than $150. However, after the passage of the amendment Bill, the cost is now $5,000.
Further, a person who hires or lets to another person a licence granted to him, makes use of, trades, or acts in any way with any licence in which their real name is not inserted will have to pay no less than $5,000 and no more than $10,000.
Weighing in on that debate was PPP/C MP Dharamkumar Seeraj, who said that he agrees that the age-old fees should be increased. However, Seeraj said that this should be done on an incremental basis whereby there is a gradual increase of the fees
Seeraj said that there should be no rush to institute these sudden increases. He said that the government has chosen this path so as to fill the fiscal gap in order to finance its $250B and as such is going out of its way to bring huge taxes on the regular man and woman.
The MP said that the increased costs will affect the regular donkey cart, local schooner, sloop, vessel, boat, bateau, punt, corial and craft operators, who are most times poor people trying to make a living.
In spite of these arguments, the Finance Minister said that the increase is needed, since they were never changed over two decades. He told the House that had the PPP/C sought to increase the fees incrementally during its time in office, the APNU+AFC government would not be in the position today to raise the costs.
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