By Peter R. Ramsaroop, MBA
Introduction
The Guyana Revenue Authority’s (GRA) booklet on VAT which was published in 2007 states this: “However, overall, a net increase in the cost of living is not expected. In addition, there are many goods that are subject to the payment of 30% consumption tax, and the prices of these goods are expected to decrease since the goods will be subject to the payment of VAT at a rate of 16%.” As I have stated before, we all know this never happened. We are faced with the Vampire Around Town (VAT) every day, and we hope the Vagabond Attacking our Throats (VAT) everyday will soon stop.
The President said last week that since they have managed the economy well, they can afford to give the public servants a 6% pay raise. Sugar workers, on the other hand, got 3% increase thereby testifying that sugar is not doing that well. Well, we know why sugar is not doing well today. The problems go back to the failure of the PPP government to think long term and to have a clear vision, beyond obtaining quick and easy cash, for the economy.
Last week I visited Mahdia and Kwakwani and saw firsthand the effect of VAT on the cost of goods, transportation and energy which makes living in Guyana even tougher for regular folks. There are no immediate solutions for these communities. For example, since none of the smaller hydro plants proposed for example in Tiger Hill is being resourced, cheap renewable energy is not being generated.
School children are getting their report cards; the same must be done for those we pay everyday to be in office. Today this column measures whether our lives have improved from the previous year. Is the increase in our salaries above inflation, would 3% or 6% make any significant difference in 2010 when cost of goods continue to rise?
Every day we are bombarded with fake letter writers in one newspaper who commend the PPP/C for its economic progress. The measurement for such progress the propagandists said was “new buildings, four-lane roads, new stadium, new hotel, and street lights.” We all know those were built by aid money and the so-called progress is not due to a robust and competitive economy.
The report card
What do you consider economic success? Use the following as a guide that you can grade for yourself the report card of the PPP/C for 2009:
1. What was your salary five years ago is it much different today? Do you depend on family abroad sending you a little cash, barrels and goodies?
2. Do you have a job and is it a job that has advancement opportunities?
3. Flash forward to 2011 – almost 20 years of PPP rule – Our country is still the poorest in South America as it was in Burnham’s 21 years of rule.
4. Unemployment rate, the highest in South America
5. Crime, less safety and security – are you safer?
6. Corruption – report from Transparency International already rated us the most corrupt country in the region.
7. Narco trafficking – alleged drug lords arrested, let go, arrested, let go. Successful prosecutions of local ‘big fish’ only occurring outside Guyana.
8. Controlled media – one state-run radio station for such a large country.
9. Overt partisan political intervention by the government in the day-to-day operations at University of Guyana.
10. VAT implementation sees the highest tax in the region for this type of tax for Guyanese.
11. Huge loss of international respect on governance. Officials denied visas.
12. Governmental abuse of power – concessions to friends.
13. Migration to the Caribbean, legal and backtrack, highest in decades.
14. Migration to US and Canada, legal and backtrack, highest in decades.
15. Schools that have not been internally upgraded in 30 years – without indoor plumbing/toilets and no computers.
16. Minimum wage for a store worker is about $3,000 a week, are you one?
17. To buy a car and pay $75,000 a month requires you to make three times that amount, do you?
18. Tax is controlled by government – what do you pay (16% VAT, 33.3% Income Tax, 5.6% NIS, License, Rates and Taxes, Property Taxes…)
19. Living standards are stagnant – how many still can’t afford gas stoves in this country?
20. Has the GRA done any homework on where money comes from to build housing schemes and hotels?
21. How much money a month do you have to get from your relatives overseas in order to survive?
22. How many of you have to cheat on electricity just to have lights for your children to do their homework?
23. Where did the money come from for the Berbice Bridge? Your NIS that you are supposed to get when you retire. Can you pay the high tolls?
24. How many of you wake up every day wondering where you would get money to send your children to school, food, transportation, uniforms etc. Is there free school bus transportation?
25. How many of you store owners keep two books, one for you and one for GRA, just to survive and keep your business afloat?
26. We are in the Christmas season, do you have any extra money saved to buy presents for your children. Rewind to five years ago, were you not in the same situation?
27. For you overseas-based Guyanese, when you come back, do you complain of your lowered productivity due to unreliable and overly expensive electricity? Do you wonder if you would have blackout at night? Are you afraid to go anywhere because of the crime situation? Do you say to yourself, I can’t live like this anymore…why?
28. How much extra money (consumer spending) do you have a month to buy nice things for your children and yourself or take your partner for a nice dinner?
Conclusion
Without the right tax reduction and incentives; the right controls, accountability, transparency, and good governance; without the heavy interventionist hand of government on the private sector, the economic progress of our nation will continue to be stagnant.
The few who get money from corruptly awarded contracts, who can then put up large buildings, will rate the report card higher. Those who used our taxpayers’ money to build hotels will answer the report card differently. For all others, I will be curious what your rating of the PPP report card will be. If it is only on maintaining roads and street lights, then it will get a sure ‘B’.
If you have been able to move from a bicycle to motorcycle, then to a car; you can now afford to buy a house and have money to buy your children food and clothes and you have all of those necessities without depending on folks overseas, then you will rate it high.
If you are still struggling and wondering where the next $1000 (towel) will come from then remember, it is our job to tell our government it is doing a poor job on managing the economy, and that it is time for new economic management of the country. Until next time “Roop”.
Send your answer to: Peter.ramsaroop@gmail.com
