Latest update April 23rd, 2024 12:59 AM
Mar 04, 2018 News
…predicts rise in domestic sugar prices
Chartered Accountant, Christopher Ram has highlighted the lack of planning in the sugar industry over the years while recommending a range of tax incentives that could benefit regions reeling from the economic fallout from the retrenchment of estate workers.
Ram was part of panel discussion at Moray House in Georgetown last week that explored solutions for Region Six (East Berbice-Corentyne) that saw more than 4,000 sugar workers being laid off from the state-run Guyana Sugar Corporation (GuySuCo).
According to Ram, the regional administrations must be involved in the process of solving the socio-economic issues that the former sugar workers and the wider communities will face in the coming months.
Ram pointed out that while there will be more efforts to galvanize economic activities through the creation of industrial parks, tax concessions or tax rebates in respect to the employment of former employees should be considered.
“If an employer decides to employ former employees of GuySuCo we will give certain types of concessions,” Ram explained.
In Regions Six there was the closure of Skeldon and Rose Hall and the closure of the Wales Estate.
Ram noted that before the closure of the Sugar estates in Region Six, the population has been declining— from 152,386 in 1980 to 109,431 in 2012.
Ram suggested that Regions Three and Six should be listed under Section 2(a) of the Income Tax Act to allow them to access special fiscal incentives.
The chartered accountant also recommended tax redemption for organisations that make donations to causes that benefit former sugar employees.
“The situation is not entirely hopeless. Let us not been too pessimistic; let us hope that the Government will come to understand that we have a major national crisis. It requires the commitment and involvement of every single one of us. If we can do that perhaps it will help to mitigate if not solve the problems,” Ram stated.
The chartered accountant noted that there are suggestions of small and medium-size businesses providing employment for workers in the region, but the scale of the problem is of such magnitude they will be unable to address the current problems of the likely serious, human and financial cost.
SUGAR PRICES & PLANNING
Ram stated that with the sugar estates closed, consumers can expect sugar and related product prices to increase on the domestic market.
“Unless the Government imposes some sort of price control in terms of domestic sales then we will have domestic sugar prices going up not only directly, but several other items because sugar forms an important staple in many products used by consumers,” Ram explained.
He questioned what the Government’s objectives are by moving to privatize GuySuCo, whose assets and management responsibilities have been turned over to the Special Purpose Unit (SPU) that has been set up under the National Industrial and Commercial Investments Limited (NICIL).
The SPU is tasked with examining and articulating the way forward with respect to the divestment of the Skeldon, Rose Hall, Enmore and Wales estates.
“In my view to delegate an important problem like this to an agency is curious, if not dangerous. It is also a people problem. The road ahead is going to be very difficult; it is going to be hard and arduous,” Ram stated.
Ram noted that so far there have been several plans, but absolutely no planning.
“The planning is elementary at best, opportunistic and without any kind of thinking at worst. We have had some set of plans – Commission of Inquiry, Errol Hanoman, the Clive Thomas plan and we are here with the Special Purpose Unit of NICIL that is in control,” Ram stated.
The government recently announced that it is close to securing a loan of some $10B to $15B to fund the operations of the sugar industry via NICIL. The plan is to re-open the estates because investors want to examine the sugar factories in working condition. There have been 70 expressions of interest to purchase the estates.
The Coalition Government has indicated that they have injected over $32B in subsidies for the past three years, which placed a financial strain on the country’s coffers.
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