With the Value Added Tax (VAT) and the Excise Tax reaping some $36.7B, way over projections for 2007, PNCR-1G Member of Parliament Winston Murray yesterday called for the 16% VAT to be chopped to 10% and pointed out that the party had supported the new tax regimes on the basis of a projected take of $24B.
Speaking during the first day of the debate in Parliament on the National Budget, Murray, a former Minister in the PNC administration, waded into the Government for not being truthful from the start about the amount of revenue that VAT would have been bringing in.
He said that the VAT and Excise take of $36.7 billion represented a revenue-positive yield of 48 per cent over the revised projection of 24.8 billion. An impact assessment study back in 2005 had suggested that the new regime would have garnered $16 billion from the taxes replaced.
He argued that the explanation proffered by Minister of Finance Dr Ashni Singh during the budget speech cannot be sustained. The Minister had sought to explain that the high takings of VAT and Excise Tax were attributable to the increase in imports.
Murray stated that the Government has committed a breach of faith upon the people of Guyana with the windfall that has been made through the pockets of the taxpayers. “The theme of the budget is Staying the Course: Sustaining the Transformational Agenda, but the Minister needs to add another subheading: the VAT runneth over,” Murray said.
According to Murray, part of the additional resources allocated in the National Budget had to have come from the windfall made from the VAT and Excise Tax. “In deviating from a pact with the Guyanese people, an explanation is needed,” said Murray. “How could Government use that windfall without consultation,” Murray asked, adding that because of VAT, great hardships have been visited upon people. “The people need to be relieved of this millstone around their necks,” he said. “The PNCR calls for the immediate reduction of VAT to not more than 10 per cent. That would be a 37.5 per cent reduction and less than the 48 per cent windfall the Government is getting,” he said.
Speaking in the National Assembly yesterday, Minister of Labour Manzoor Nadir said: “Yes, VAT revenues [were] $12 billion more than projected, but this is because of growth in the economy
