Dear Editor,
The introduction of VAT or Value-Added Tax came like a sudden tsunami upon our nation. The new tax system created more confusion among the business community as well as the consumers. Our present administration gave our nation the confident assurance that VAT will reduce the cost of some items while some will increase.
What has happened is quite the opposite. I note with interest that since the beginning of the year most basic food items such as bread, sugar, cooking oil, milk, onion, garlic etc have increased by $10,20,30,40 on every item. These items are zero rated but we still see an increase in the shops and markets.
Most customers can clearly see that many shop owners are now charging the 30% consumption tax as well as the 16% value added tax. I wonder if the GRA will have price control officers to visit and examine every shop in Guyana to see that they are not robbing the consumer.
Will the GRA establish a VAT office in every community to deal with these unscrupulous practices?
Why would the Government want to implement such a new tax system in our country that is so poor and undeveloped? In my opinion the Government in collaboration with the GRA failed to study our poor economy as well as the pay package that is given to public servants.
They have implemented VAT that is 16%,yet the salary of public servants was raised by 5.5% and 6% in some cases.Sugar workers received an increase of 5.5%, pensioners 6% and the long dismal list goes on.
Many business places and staff don’t even know how to start and shut down a computer.
The business community will now have to employ computer experts as well as accountants to help them to comprehend the VAT system because they are not properly educated in these areas. Many businesses will charge VAT on every item because that is how they programme their computer system. These businesses should have two computers to deal with their stocks. One computer will bill the customer for zero rated items while the other will bill the customer for the VAT rated items. This will give the customer a clearer understanding about their bills.Shop owners need to display two lists in their shops for the public to view
pertaining to the items that carry VAT and Zero rated items that do not carry VAT.
People who cannot read nor write will be easily fooled.
I read from a brochure that VAT will replace six existing taxes which are as follows: consumption tax, telephone tax, purchase tax, service tax, hotel accommodation tax and entertainment tax. Our present telephone tax is 10%, if 10% telephone tax is replaced by VAT it means consumers will now have to pay 16% telephone tax. This with increase phone bils by 6%.
In my opinion every business both small and large should register for VAT because the small businessman will buy his goods from the big businessman; the small business will now pay VAT to the big business but the small businessman cannot charge VAT on his goods because he is not registered to collect VAT. The small businessman will now have to increase his cost on his goods to get back his money he paid the big business on VAT. This is an unjust law that needs amendment.
It is my sincere hope that our Hon. Finance Minister as well as the GRA and the Government study the problems VAT is creating and remove it and implement it when our people are more mature and educated to deal with it.
Yours faithfully,
Rev.Gideon Cecil
