Guyana is moving again to amend an environmental tax provision in the law that the Caribbean Court of Justice (CCJ) said discriminates against importers of beverages from other Caribbean Community (Caricom) countries.
Minister of Finance Dr Ashni Singh laid the Customs (Amendment) Bill 2014 in the National Assembly on Thursday. The Bill seeks to lower the rate of the Environmental Tax charged on beverage containers while widening the range of bottles, cans and other receptacles that will attract the tax. Current laws exempt local manufacturers from this tax which is applied at a rate of $10 on imported alcoholic and non-alcoholic beverages. The proposed legislation will see a $5 tax on all bottled beverages that have been imported or produced here meaning that local manufacturers will also have to pay the tax.
According to the Explanatory Memoran-dum, the Bill seeks to amend the section in the 1995 Customs Act which imposed an Environmental Tax only on taxable goods imported into Guyana. These taxable goods are every unit of non-returnable resin, metal, plastic, glass containers containing any alcoholic beverage or non-alcoholic beverage, cardboard containers having been removed from the list of taxable goods by virtue of the proposed amendment.
The amendment extends the tax on goods imported for manufacture of such items in Guyana. Under the proposed law, a person liable to pay the tax, but who fails to do so, shall be guilty of an offence and shall be liable to a fine of $5000 and, in addition, shall pay to the Commissioner-General of the Guyana Revenue Authority (GRA) twice the amount of tax payable. The paltry fine will likely raise eyebrows during the parliamentary debate.
The application of the tax only to imported beverages was challenged and last month, the CCJ ordered the Government of Guyana to pay Suriname company Rudisa Beverages some US$6, 047,244.47 ($1.2B) which had been collected via the tax. The CCJ ruled that the tax contravenes the Revised Treaty of Chaguaramas (RTC). Guyana was also ordered to take the necessary legal or other measures to prevent the collection of the environmental tax on goods of Caricom origin. According to the ruling, the country is also obliged to file a report with the Court within six months on its compliance with the orders made by the Court.
Rudisa Beverages & Juices N.V. and its Guyana subsidiary Caribbean Inter-national Distributors Inc had filed an application with the CCJ alleging that the imposition of the environmental tax by Guyana was a breach of the RTC. They argued that the tax was inconsistent with Caricom trade policy set out in several Articles of the RTC which provide for the free movement of goods and prohibitions on the imposition of import duties on Caricom goods. The two sought a declaration that the Guyana Customs Act violates either Article 87 or 90 of the RTC; an order compelling the State to amend or repeal the legislation to eliminate its discriminatory effect; an order restraining the imposition and collection of the tax and damages.
The companies had noted that the imposed tax on their goods raised the cost price on each imported container by $10. No similar tax is imposed on local producers of non -returnable beverage containers and, by the definition of “Import Duties” laid down in the RTC, the levy must be regarded as an import duty, they argued.
In its ruling, the CCJ declared that the tax was inconsistent with the RTC, the founding treaty of Caricom, and ordered the State to take the necessary action to ensure that it was not applied to goods of Community origin.
The Court also ordered that the claimants were entitled to a repayment of the tax which had been paid by them and collected by Guyana.
The combined opposition parties, APNU and AFC had last year used their one-seat majority to block Government’s amendments to the Customs Act following the administration’s refusal to postpone the consideration of the Customs (Amendments) Bill 2013 in order to conclude promised consultations with the private sector.
