The opposition yesterday criticised government for stealthily revoking a waiver of the Value Added Tax (VAT) on heavy-duty capital equipment, which the Rice Producers’ Association (RPA) called the “death knell” of the local industry.
Order 6 of 2016, signed by Finance Minister Winston Jordan on January 29th and published in the Official Gazette on February 10th, states that paragraph 2 (aa) of Schedule 1 of the Value Added Tax Act is revoked. According to PPP/C MP Anil Nandlall, the section had provided for the zero rating of heavy-duty equipment destined for the agricultural sector.
Section 2 (aa) provided for a zero rating of “the first import, after the coming into operation of the VAT Act, of one of each large capital item of equipment such as a bulldozer, excavator, tractor, or similar heavy duty industrial machine by a person who invests in these items, provided that on the day prior to the coming into operation of the VAT Act the import of the item by the person was subject to Consump-tion Tax at a rate of zero percent and that the importation is not subject to an investment agreement, and further provided the zero-rating of subsequent imports of these items are allowed under conditions and restrictions that may be prescribed by the Minister.”
The PPP/C yesterday said government has revoked this waiver without informing the public of the decision or proffering any explanation. Stabroek News made attempts to contact Finance Minister Jordan for comment but was unsuccessful.
Speaking at a press conference held at Freedom House, PPP/C Chief Whip Gail Teixeira referred to the manner in which the order was passed as mischievous and sinister.
“Order 6 of 2016 deals with Value Added taxes and saw several items added to the zero rated items yet in the middle of the order there is a sentence which revokes the zero rating of heavy duty equipment,” she said, while adding that this decision was taken “without any debate in the House, without any reference in budget document and without any statement from the government.”
According to Nandlall, who was at the news conference, persons became aware of this decision via a notice in Wednesday’s newspapers.
Teixeira noted that the passage of the order raises a number of matters in relation to the breach of parliamentary Standing Orders.
“The Clerk should’ve advised that it have an affirmative or negative resolution. An order must have either a negative or affirmative resolution not both,” she explained.
Meanwhile, the RPA issued a press release condemning the order.
In the release the RPA ex-pressed its intention to “oppose, utilising every means at the organization’s disposal, this further blow delivered to the productive sector in general, and rice farmers and millers in particular.”
It contended that the removal of the zero-rated status on the heavy duty farming and milling equipment “is the death knell of the rice industry”
It added that it is gravely concerned about the government’s “reneging on pre-election promises to rice farmers, producers and exporters for facilitation mechanisms to be implemented to boost the rice and other productive sectors.” It further warned that “these retrogressive actions” will prove a serious impediment to the national macro-economic fundamentals as investors will be unwilling to put trust in an administration that is perceived to be investor unfriendly.
