Dear Editor,
I have noticed the confusion (that most predicted) with the implementation of the Value Added Tax on January 1, 2007. The Guyana Revenue Authority seems to have its work cut out monitoring or having all the registered and non-registered businesses comply with the VAT application.
I have heard some fascinating stories since Jan 01, 2007 and this is only the 3rd of January. For instance, one supplier to my company sent us a charge bill for an item we purchased with the cost for the item on the bill. When we queried the absence of VAT the supplier redid the bill with the same cost plus VAT, thus making the purchase costlier. This application of VAT is erroneous, the price of the item should have reduced or at the least remain the same if Consumption Tax was already applied. It is obvious this supplier applied VAT without reducing the Consumption Tax or his markup went up on January 01, 2007.
Now, we all knew that some businessmen would try to milk this situation and create more confusion since they were comfortable with the previous environment. Look, I do not support this government on most of its policies but I am supporting them with VAT (regardless if it was IMF mandated or not) because I believe it is good if properly implemented and monitored. That being said, I want to propose a way for the citizenry to help GRA in policing VAT.
Since customers were carrying the blunt of the tax burden for years, especially workers, maybe it is time for some pay back in a win-win situation. The Government should offer workers an Incentive or Allowance (whatever the experts may want to call it) for VAT paid on all purchases. Con-sumers/Workers can be reimbursed the entire 16% or a potion of the 16% whenever they submit their tax return annually. However, this should only be applicable if proof can be provided for purchases made and that VAT was paid. In doing so, the consumer/worker would be forced to demand a receipt for every purchase and ensure that VAT is properly applied if they want to benefit from the allowance/incentive. There are a lot of benefits from this:
1. The customers/workers would be forced to change their purchasing habits.
2. Unscrupulous businesses would be indirectly boycotted.
3. Enable GRA to have a consumer feedback system in place, whereby they can monitor which businesses are fleecing the consumers.
4. Alleviates the 33.3% Income tax burden on the poor working class.
5. The self-employed and other types may be persuaded to be regulated when they see there are benefits.
Besides all of the above, if businesses can claim reimbursment from INPUT VAT, why can’t workers benefit too since they are now paying the highest tax in the land. This is something the powers that be should think about.
Who knows, maybe the Government may get a landslide next election.
Yours faithfully,
Vance Reid
