VAT is imposed by section 9 of the Value-Added Tax Act 2005 on every taxable supply by a taxable person in Guyana. Taxable activity is any activity carried on continuously or regularly in Guyana, whether or not for profit, that involves or is intended to involve, in whole or in part, the supply of taxable goods or services to any other person for consideration.
As we understand it, the crossing is an activity carried out by the Demerara Harbour Bridge Corporation under the Demerara Harbour Bridge Act 2003. We further understand that the Corporation is not registered under the VAT Act even though it is obvious that the value of the service it offers would far exceed $10 million. The question then is whether the service is exempt under the Act and as we pointed out yesterday for any goods or services to be exempt it must be specified in paragraph 2 of Schedule II.
The closest which Schedule II comes to this is contained in Paragraph 2 (e) and (f) as follows:
(e) a supply of any goods or services by the State, a local authority, or an charity where the consideration for the goods or services is nominal in amount or not intended to recover the cost of such goods or services
(f) a supply of all goods and services by budget agencies named in the schedule to the Fiscal Management and Accountability Act 2003 (FMAA) and by state agencies that perform regulatory functions by statute; or
We can discount (f) because the Demerara Harbour Bridge is not listed in the FMAA nor is it an agency performing regulatory function. It is doubtful whether the DHB comes within the definition of “State” – unhelpfully defined in the Act as meaning Guyana or the Republic of Guyana because section 9 (6) of the Act makes a clear distinction between the State and an agency of the State.
In other words, Schedule 11 does not include the services offered by State Agencies and it seems that there is no legal basis for the DHB not registering under the Act and consequently charging VAT even if it decides to treat its charge as VAT inclusive and absorbs the value of the tax.
Might I say that the same applies to the Guyana Post Office Corporation.
