The National Assembly yesterday moved to repeal a $10 environmental tax on non-returnable containers of imported beverages as part of its obligations under a ruling by the Caribbean Court of Justice (CCJ) and Finance Minister Winston Jordan signalled that in excess of over $1 billion would be lost annually as a result.
The tax was implemented in 1996 as part of the Environ-mental Policy under the former government’s National Development Strategy. The policy outlined a clear and urgent need to protect the environment and towards this end the former government enacted the Environment Protec-tion Act and an Environmental tax was imposed on all imported, non-returnable, beverage containers pursuant to section 7(a) of the Customs Act. This section levied and collected $10 on “every unit of non-returnable metal, plastic, glass or cardboard container of any alcoholic or non-alcoholic beverage imported into Guyana.”
Jordan, who successfully piloted the Customs (Amend-ment) Bill to repeal the tax, explained to the Assembly that on an annual basis this tax has yielded in excess of $1 billion and therefore its loss would amount to a “significant impact on the treasury.”
He, however, noted that the CCJ “judgment is final and must be respected and implemented since the CCJ is recognised as our highest court.”
The judgement was awarded to Surinamese company Rudisa Beverages & Juices N.V Carib-bean International Distributors Inc. Rudisa had challenged Guyana’s implementation of the tax as being in contravention of Article 87 of the revised Treaty of Chaguaramas.
Under this article, Member states are prohibited from imposing import duties on goods which originate from any of the countries which are part of the Carib-bean Community (Caricom).
The CCJ found Guyana to be in breach of this provision and ordered that the country “cease forthwith the collection of [the] environmental tax …and…adopt legislation…to ensure that such tax is not collected on goods which qualify for community treatment.”
Foreign Minister Carl Greenidge made sure to distance the then opposition from the fiasco which resulted from the implementation of the tax. According to him, when the previous government decided to impose the tax it was not “unaware that it infringed the treaty.” “We accept no responsibility for what was an irresponsible tax in the first place,” he said, while referencing what he referred to as the former government’s numerous attempts to blame the burden of the fine on the then opposition.
According to Greenidge, the former opposition brought it to the previous government’s attention that the bill infringed the treaty’s provisions when it was first laid and even after “continuous meetings” and an agreement to amend the bill they then didn’t amend it “in the manner which was most obvious.”
The enactment of the amendment bill will place Guyana in conformity with the Treaty of Chaguaramas and the CCJ’s ruling.
Jordan, in his presentation, also acknowledged the previous government’s attempts to comply with the CCJ’s ruling and noted that in 2014 it was proposed “that manufacturers as well as importers be subject to a $5 tax on non-refundable alcoholic containers.” This proposal, he said, did not meet with the approval of the National Assembly.
In his presentation, Jordan also acknowledged that the previous PPP/C administration had argued against Guyana paying the damages on the grounds that the company had already recouped its loss by adjusting the prices for its products. However, Guyana had provided no evidence to prove that point. He referred to this as an important argument which was dismissed for lack of evidence.
The new government, according to Jordan, intends to address its environmental obligations through wide consultations with the Guyanese people and would enact legislation that would enable the relevant public agencies to negotiate and adopt measures and instruments that enforce the “polluter pays principle” through various incentive and non-incentive mechanisms.
Attorney General Basil Williams said that the tax would stop being levied from today. Williams further noted the CCJ would be informed during a video-conferencing hearing today that the damages of US$6.2 million will be paid by Guyana in full to Rudisa. He added that Guyana has until January 31, 2016 to complete the payment.
