Dear Editor,
Since the May ruling of the Caribbean Court of Justice (CCJ) on the Rudisa Environmental Tax matter, much has been said about what should or should not be the position of the Government of Guyana on the ruling. While states that have signed on to the CCJ, as the last instant of appeal, have an obligation to abide by the CCJ’s ruling, on the Rudisa matter I feel strongly that the government should not be rushing to settle with Rudisa. Whether Rudisa or its local subsidiary, Caribbean International Distributors Inc (CIDI) was the litigant, I am going to deal with them as the same, because for all intents and purposes they are the same.
First, Rudisa nor any of the other beverage manufacturers who import into Guyana, have not lost any money because of the environmental tax. They may have lost market share, but they certainly did not lose any money. Every dollar of that environmental tax which was paid by CIDI/Rudisa was passed on to the Guyanese consumers. Thus should Guyanese tax dollars have to now pay the CCJ decision we will be paying twice, first as consumers and secondly as taxpayers.
Secondly, before the Government of Guyana pays any money it should look at the implications for corporate taxes which CIDI/Rudisa should have to pay the Guyana Revenue Authority. The CCJ’s ruling was that the US$6,047,244 represented the amount of the environmental taxes which the company CIDI/Rudisa paid. This is equivalent to 120,944.880 bottles of beverages which the company, CIDI/Rudisa, imported and sold in Guyana over the relevant period. If that company made a net profit of $20 per bottle then their profits would have been US$12 million. It would be interesting to see what the declared profits of this company were and the amount of corporate taxes which were paid. Nevertheless, even if Guyana were to pay what the ruling states then this would have to be accounted for on the revenue side of the company’s balance sheet here in Guyana. Thus the applicable corporate taxes have to be paid to our country.
On this second point of the corporate taxes the government through the GRA should make this calculation and the exposure of the state would be drastically reduced ‒ in fact, by much more than the reduction/favour which the company seemed to be doing for our government.
On the matter of the Guyanese consumers paying for the environmental tax, this should be the basis of a class action suit which the Guyana Consumers Association should now take up in our local courts. That US$6 million could go a long way towards developing a recycling programme. Guyanese manufacturers should also look at bringing cases against their regional competitors selling in our market, who benefit from subsidized energy costs in their home country.
Finally, in the matter of cases that involve commercial/economic matters we have to assemble a competent team of economists, versed in the area of competition and antitrust matters, who will assist our lawyers in dealing with these cases. The thrust of the regional and local competition commissions is dealing with the economics and making companies behave as if they are in a state of pure competition. This is an area of economics which is new to Caricom but which has well established principles that are pretty complex, but which can be readily modelled.
Yours faithfully,
Manzoor Nadir
