Government yesterday announced that it had cut to zero the excise tax on diesel in an effort to ease the burden on consumers amid rising fuel prices worldwide, the Government Information Agency (GINA) said.
According to a GINA bulletin Minister of Finance Dr. Ashni Singh made the disclosure during an interview with the agency.
“Today I issued approval for the excise rate on diesel to be reduced from 10 percent to zero given the recent further escalation in oil prices on the world market. This latest reduction is a further step by Government to cushion the impact of world market price developments on the domestic consumer including, particularly in the case of diesel, industrial users for whom diesel is a key input,” Minister Singh was quoted by GINA as saying.
According to GINA the acquisition cost for diesel and gasoline has been increasing steadily over the last year. In January 2007 gasoline was being imported into Guyana at US$58.83 a barrel. The last shipment of gasoline came in at US$109.55 per barrel which represents an increase of 86.2 percent, GINA disclosed. It added that in January 2007, diesel was imported at US$61.47 per barrel while the last shipment was priced at US$130.87, an increase of 112.9 percent.
The Finance Minister explained that by taking such a step, Government is foregoing its tax take on diesel so that the price that will be paid by both the individual and industrial consumers will not escalate as much as it otherwise would as a result of the drastic increases being observed on the world market. He pointed out that it will result in a revenue loss to Government, but that the move is being made by Government taking a holistic view of the impact of oil prices on the domestic economy.
“Clearly it has a negative impact on government revenue. Whereas we would have been taking 10 percent of the CIF value of the diesel landed in Guyana, we will now be taking zero,” Singh told the GINA.
Last year the revenue authority’s take was way above projections as a result of the Value Added Tax.
This administration has progressively reduced the rate of tax applied to gasoline and diesel, GINA said noting that currently gasoline stands at 17 percent and with this recent move diesel is at zero percent.
The government has also maintained its policy of zero taxation on kerosene.
