Dear Editor,
I empathise with Heather Martin’s letter captioned “I was charged $56 extra on a tub of butter, the supermarket said it had already paid consumption tax of 30%” (07.01.04). I however disagree with the views expressed in her last paragraph.
Many businesses have not increased their prices for items; it is government’s imposition of VAT which has sent up the prices. The consumer was paying the old price before VAT and they had no quarrel.
From the President down, we have been fed with less than the truth. They have been telling Guyanese that the price for goods will drop. But when? Government is conveying the impression that things will get cheaper immediately.
Many businesses imported goods prior to December 2006 and paid 30% c/tax (often paying to the bank about 16% overdraft interest on top). This 30% was paid to government at the time of importation and, naturally, formed a part of the total cost of goods. If Ms. Martin and the goodly President and his VAT experts can tell businesses how to recover the c/tax already paid to GRA, I am sure that businesses will readily adjust selling prices. Instead, officials issue public statements which gloss over the c/tax burden of the business community.
The government was asked on several occasions to allow businesses a rebate of c/tax on inventory as at 30th November 2006, or some similar accommodation. Government refused the request.
Business people in general have no wish to exploit the consumer. Business people are themselves consumers. But when a government, without the ability to generate revenue other than by taxation seeks to increase revenue, who bears the burden? Obviously, the consumers. This is the doing of the government, not businesses!
The VAT Secretariat has made a mess of the entire VAT process. Many businesses who sent in VAT Registration applications since early December have not received their TIN Certificates or, if they have more than one business location, they only received one certificate. Or, if they have more than one business location, they only received one certificate. Enquiries at the VAT office are a waste of time. No officer is there to answer your queries.
They do not have a comprehensive list of zero-rated/VAT exempt goods, or they have run out of copies of the list. And the mess keeps piling up.
In any other country, the whole GRA hierarchy would have been fired for incompetence. The news media must go beyond the superficial in their treatment of issues as controversial as VAT and for its implementation. Reporters must analyse all sides – not just parrot what the government says.
I sincerely hope that the VAT experts clean up the mess inside GRA before they go threatening people.
Yours faithfully,
R.N. Singh
Editor’s note
In the case of this newspaper, consumption of tax of 10% used to be paid on imported newsprint. That has now been abolished and VAT of 16% is paid. VAT is then charged and collected on the sale of newspapers. The price of a newspaper is inevitably much higher than the cost of the newsprint as it includes salaries and overheads. The VAT on sales will therefore considerably exceed the VAT on imports and for a newspaper to absorb this difference will be very expensive.
This virtually forces a price increase.
