Dear Editor,
It is immoral, cynical and opportunist, to say the least, when persons, organisations, or political parties seek to revise or rewrite the history of distant events to suit their own purposes or as part of some sordid design. It goes beyond the pale, however, when this revision or rewriting takes place concerning events that are currently unfolding. History, as it were, is being made! Sadly, the ongoing struggles around the imposition of VAT and the public reaction to it, are turning out to be the latest victim of this immorality and cynical opportunism.
Christopher Ram
and the debate
The facts are clear. The most recent phase of public struggle over the VAT is best symbolised in Christopher Ram’s contribution to the now-famous PNCR debate held at the Hotel Tower on Tuesday, November 21, 2006 on the subject. After that, other political parties joined in, including the WPA, which, as we shall see at that stage had held the longest record of public dialogue on the VAT in Guyana.
In what followed, notably, Red Thread, the Guyana Human Rights Association (GHRA), the Guyana Trades Union Congress (GTUC), and CN Sharma and his Justice For All Party made the most concerted efforts to press for change. Indeed, CN Sharma and Channel 6 displayed exceptional community mobilisation and persistence in voicing public discontent over the measures. The GHRA mobilised civil society to highlight the human rights and poverty aspects of the Bill. The Red Thread did an enormous amount of grassroots work involving, housewives, mothers and other women. The GTUC was also stout in its opposition to the VAT tax and adopted many of the positions advocated at that stage by the WPA. Regular press releases and letters to the press indicating the horrendous economic and social costs of the VAT were publicized by several individuals and organisations including those mentioned.
The Select Committee
presentations
Immediately preceding the PNCR debate and Christopher Ram’s presentation, however, two significant submissions were made to the Select Committee appointed by the National Assembly to examine and report on the VAT legislation. One was made by Christopher Ram and the other by Distinguished Prof. Clive Thomas and his IDS team. These were circulated widely among organisations, political groups and civil society.
All during this period parties and other organisations made contributions in their own way. Thus the WPA publicized the Guyana Revenue Authority (GRA) figures on the bumper tax yield that exceeded all expectations and called for the Government to lower the tax rates immediately on the standard of living of wage and other fixed income earners.
While broadening the base of opposition to the hardships and excesses of the VAT is welcome, those entering the fray now need to be respectful and honest towards ongoing efforts. Jumping on the bandwagon, as it were, seeking some political advantage on this serious issue should be treated for what it is worth with the utmost disdain.
A Plan for the VAT
Once again, WPA urges readers to revisit its 1992 Manifesto, where it first called for a National Commission on Tax Reform. In the context of that proposal, the VAT was advanced as a possible new tax, if taken together with income tax reforms (rates and threshold) and a re-visit of the then existing system of “tax-holidays”, granted in the main, but not exclusively, to foreign firms. VAT cannot be treated as a stand alone proposition. To succeed, it must be a part of a more holistic reform of the financing of state activities.
The National Commission on Tax Reform proposed by the WPA is envisaged as a means to achieve several objectives at the same time. First, it would be part of a process, not a single episode event. It would involve all stakeholders – taxpayers, government, business groups, unions, farmers organisations, professional bodies and Parliament. Second, it would serve to reduce conflict and seek out national consensus building. Third, it would take place in a comprehensive and systematic way treating the tax environment as a whole and not in piece-meal fashion as it now happens. Fourth, this would legitimise the subsequent zero tolerance approach to tax violators, as all stakeholders would have shared in the design and implementation of the process. Finally, it aids democratic-decision-making, accountability and transparency in the broader society.
It would not be appropriate to end without stating that the major concern of all the organizations mentioned above was that claims of intended budget neutrality by the government were unjustified. Now the unprecedented regressive nature of the VAT with its deleterious effect on poverty alleviation efforts, and on the standard of living of fixed income earners and those least able to adjust is clear. Given the unexpected revenue bonanza from the VAT, what is needed is a reduction in the overall rate, and an extension of the exemption list of basic goods and services (particularly public utility services), and specifically imposing an even lower VAT rate on same.
Yours faithfully,
Desmond Trotman
Centre Manager
Rodney House
