Dear Mr. President,
We welcome the statement you made on Saturday, January 13 that Government has been reviewing VAT and will probably make some adjustments this week.
For all of us who are unwaged housewives and low-waged workers, women and men out of jobs and pensioners, the rises in prices since VAT was introduced are not “glitches” as the Guyana Revenue Authority (GRA) calls them, they are a tragedy, and they are making our lives and the lives of our families unbearable.
Before VAT was implemented Red Thread wrote open letters pointing out our fears about what VAT would do to poor people. It wasn’t any accident that we took this stand. As grassroots mothers and sisters and grandmothers and aunts and daughters who are the main carers in our households, we do most of the shopping. In the daily struggle to stretch our families’ low incomes we are the ones “living on the frontline”. That is why we knew that GRA was wrong to say that the cost of living wouldn’t rise because prices would “balance out”, some going up and others going down. We looked at the list of goods whose prices they said would go down and saw that most were not items that we buy. We explained that in real life there is no such thing as an “average” income or an “average” basket of goods; there are fancy baskets of goods for rich people, not-so-bad baskets of goods for middle class people; and what-you-can-manage baskets of goods for poor people. We said that the GRA didn’t seem to know what grassroots women put in our baskets of food and household goods and what services we buy.
As grassroots women we are always are expected to “carry basket to fetch water”. This is what is happening here again – we are expected to do the impossible, to cover the growing gap between prices and our incomes. Red Thread works with women in various communities on the coast and in the interior. Some are domestic workers, security guards, shop assistants, and bar tenders who are often paid $3000 to $7000 a week. Some are women in micro micro-enterprise and small vending whose incomes fluctuate, but hardly ever go high enough for them to make ends meet. Some are old age pensioners who get $3500 a month. We have done some work with a few low-level public servants (who we are told are a big majority of all public servants) and we know that they are paid just over $6000 a week.
After we first wrote our open letters, some food and household items were zero-rated. But look at the multitude of goods and services we use whose prices must go up because they now have a 16% VAT tax when previously they had no consumption tax or a consumption tax less than 16%! Basic food items including salt, flour, biscuits, margarine, eggs, beef, pork, fish, black eye peas, pigeon peas, channa, jam and jelly, matches, soap (we are not sure about detergent). Cooked food sold by fast food outlets frequented mainly by people like us. School clothes and telephone calls (the Internet service is very important to our children and grandchildren to get information). In comparison to this, we heard of a major businessperson who said that for the kind of food and personal care items he imports and sells, the benefits of VAT go to richer people because these are items on which he used to pay 30% consumption tax which now attract 16% VAT. And we don’t get any discount for our purchases like the better-off people who get all sorts of discounts for bulk purchases, so they can get VAT relief indirectly.
As we monitor price changes for the baskets of goods for our households and the households of the women we work with, we are checking on prices in the kinds of places women like us shop – the market and small and medium-sized stores. Most poor women do not buy often at big supermarkets. Most poor women do not have the money to pay to “shop around” as GRA is advising consumers to do. Who will pay the bus fares for us to shop around?
From what we are hearing this price problem will not go away and the problem is not just those greedy businessmen all of us know exist. Decent business people we know tell us that they have old stock on which they paid consumption tax of as much as 30% but Government will only reimburse them a maximum of 16% and only if the goods were bought in December and sold by March. They say that most businesses’ old stock would have been bought long before December. The Georgetown Chamber of Commerce said on the news that prices cannot be reduced until all old stock has been sold out – who knows when that would be? There are people saying that prices will not go down even after the old stock is sold.
And if we can’t afford to pay the prices what will happen to the businesses which cater mainly for us – the small and medium-sized shops? Some businesses have already said that they are losing sales and have been forced to cut back or close, sending more poor people home without jobs.
If they do not cut back or close they will increase their mark-up on goods to cover expenses. Those who don’t register for VAT because they sell less than $10 million a year would have to mark up their goods to cover the VAT they have to pay on their inputs so poor people will pay VAT indirectly anyway.
Mr. President we say it again. For all of us who are unwaged housewives and low-waged workers, women and men out of jobs and pensioners, the rises in prices since VAT was introduced is a tragedy. It is also be a problem for other people; for us it is a tragedy. This is not about party politics. It is not about race. It is about the survival of all of us, our children and our families . For the sake of our families, for the sake of our children these VAT prices must go!
Signed,
Nicola Marcus, Joycelyn Bacchus
and Halima Khan for Red Thread
