Apr 14, 2017 News
-city businesses to study VAT effects on local lumber market
City businesses will soon make a case on the negative impact that the recently introduced Value Added Tax (VAT) on forest products.
This came as a result of Wednesday’s meeting between Minister of Finance
Winston Jordan, and the newly elected President of the Georgetown Chamber of Commerce and Industry (GCCI), Deodat Indar; Immediate Past President, Vishnu Doerga, and other executive members, to discuss strengthened partnerships with the Ministry. The meeting was also to explore strategic approaches to promoting growth in the economy.
The Minister was accompanied by the Governor General of Central Bank, Dr. Gobind Ganga and Commissioner General of the Guyana Revenue Authority, Godfrey Statia.
According to the ministry in a release of the meeting last evening, Indar raised a number of issues that are affecting members of GCCI. These included VAT on private tuition and forestry products; rate and availability of foreign exchange and the state of the economy.
Also discussed was the issue of local content legislation in the context of the emerging oil and gas sector and GRA’s ‘uneven’ import valuation system.
“Minister Jordan informed the group that Cabinet has agreed to review all taxes including VAT on private tuition for Budget 2018. He reiterated that VAT on private tuition was not as a result of non-compliance by the owners of private schools as is being peddled in some quarters, but rather, that it was done in the context of broadening the tax base as government sought to lower other tax rates such as income and Corporation rates.”
On the matter of VAT on forestry products, Indar stated that VAT on local forestry products makes them less competitive than alternative imported building materials, and that this is disadvantageous to the local industry.
“The Minister urged GCCI to engage its stakeholders to provide evidence based data on the effects of VAT on forestry products so as to advance a review of tax measures impacting on the sector and offered to examine other incentives to help make the sector more competitive. Mr. Indar welcomed the suggestions and promised to discuss them with his membership,” the ministry disclosed.
GCCI also reported that complaints about the availability of foreign currency are continuing particularly from small and sole proprietary businesses.
“Governor of Bank of Guyana, Dr. Gobind Ganga, informed that the exchange rate had stabilised and advised that there is enough foreign exchange available for banks to service requests from especially small businesses and individuals. Told that a request for CAN 1600 was turned down by one bank, he advised that banks should not quote the rates for currency if they do not have that currency for sale.”
However, Ganga cautioned that walk-in customers face greater scrutiny than regular customers of banks because of anti-money laundering legislation requirements.
According to the ministry, at the request of the GCCI, the Minister of Finance agreed to the formation of a small working group consisting of representatives of GCCI, other private sector bodies, importers, exporters and Central Bank that will discuss and offer recommendations for the challenges affecting the smooth functioning of the foreign exchange market including rates, availability and retention accounts.
On the state of the economy, Minister Jordan referred to the recent IMF report which stated that the country’s economy fared far better than projected; from 2.6 percent to 3.3 percent while pointing out that Guyana is one of the few Caribbean countries to record positive growth for last year.
Minister Jordan told the GCCI executives that there are opportunities available through various government initiatives which will assist in propelling the economy.
“These include an expanded Public Sector Investment Programme (PSIP), the distribution of concessions released by previous holders to new concessionaires in the forestry sector, new housing initiatives, and the imminent production of manganese.”
He also said that more than a dozen investors have expressed interest in the operations of the Guyana Sugar Corporation (GuySuCo) and that Cabinet is actively examining those proposals.
“The GCCI official enquired about local content legislation while disclosing that the Chamber would like the opportunity to comment on any new legislation, as it believes that Guyanese should benefit from the oil find.”
According to the ministry, Jordan advised that local content legislation designed to ensure domestic economic participation and development is being drafted, and urged that the Chambers pursue partnerships with other stakeholders in the meantime.
“GCCI also reported that it conducted two outreaches to businesses on Regent and Robb Streets during which many business owners complained that the GRA is revaluing their invoices and this has resulted in the payment of higher taxes for imports. Mr Indar requested that information pertaining to the process be provided to business owners.”
Meanwhile, it is being reported that Commissioner-General Statia disclosed that while imports remain stable, the Valuation Department of his agency has observed widespread under invoicing of imported building materials. As a result, he said, the GRA will shortly issue a guideline for importers in relation to its valuation system.
Other issues raised include a request for the Food and Drugs Department to be strengthened, and for a re-examination of the 2am curfew.
“The meeting closed with GCCI pledging to work more closely with the Ministry of Finance, Central Bank and GRA for the development of the economy.”
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