Opposition Leader, has said that the $25,000 container tax that City Hall has implemented is anti-business and he also voiced grave concern at the Bank of America (BOA) withdrawing corresponding banking from Guyana.
At a press conference hosted by his office at Freedom House yesterday, Jagdeo said that the withdrawal “can put the country back into the stone ages.”
The BOA, which provides correspondent banking services for some financial institutions in the Region, including those in Guyana, sent a notice about a month ago, indicating that it was severing its correspondent relationship with “indigenous banks” here.
He acknowledged that the APNU+AFC government cannot take all the blame because the de-risking policy of the banks has engaged the attention of the international Financial Stability Board for some time. The board was formed in 2008 to 2009 to determine how to get the banks to cater for risks but not to withdraw correspondent banking from many smaller countries.
Jagdeo said the People’s Progressive Party (PPP) government had tried to pass the anti-money laundering act twice and that the government, when in opposition, voted against it on both occasions. The then opposition had wanted more comprehensive legislation and was concerned that no prosecutions had been brought by the PPP/C government. This had led to a stalemate on the legislation which has since been passed.
Jagdeo said he was told that one commercial bank wrote to some of the people who were sending money abroad saying that it could not transfer the money directly. They were told that the money would have to go through the central bank, at a transaction cost of about $25 on every US$100.
With regards to the container tax implemented by the city, Jagdeo said Minister of Communities, Ronald Bulkan had related that the revenue was increasing but it was because the government was “squeezing the goose that lays the golden egg…”
He said that the increased taxes would result in the country facing a bleak future, lamenting that the government has “no plan or vision.”
According to him, “Over the last few weeks he has seen the obscene anti-business nature of the government reflecting itself once again.”
He added: “We have seen the creeping mix of policies designed to bring further hardships” and that the “enforcement of a container tax will add cost to business activities and ultimately would be passed on to the consuming public.”
Jagdeo noted that in a budget speech, he had said that Minister Bulkan had made a blunder when he spoke about increasing taxes in the city once they win the local government elections. The Guyana Manufacturing and Services Association (GMSA), he said, had raised the issue publicly about the government suddenly instituting taxes which had not been assessed for decades on “inputs into the manufacturing process.”
That, according to the Opposition Leader, can destroy the entire manufacturing base that the PPP government has, over the years tried to nurture, given the difficulty in Guyana due to the high cost of input. Critics have said that in its 23-year reign the PPP/C did little for manufacturing and that it contracted.
Jagdeo pointed out that Guyana does not have a deep water harbour and as such, freight and electricity rates are high compared to many other countries.
Jagdeo said government has “sought to justify this by resurrecting some of the list of ineligible items in the customs act.”
He said his administration had put provisions in the customs act and the consumption tax act that registered manufacturers would be eligible for the issuance for a waiver of taxes on their inputs.
The idea was that they would pay taxes only on their output, instead of paying twice on the same item.
Jagdeo said President David Granger has been “talking about a level playing field,” but he has it all wrong in terms of giving the local people the same benefits of the foreign companies.
He pointed out that it is the investment and not the investor that matters. According to him, Minister of Business, Dominic Gaskin has shut down the entire processing of duty free concessions.
According to him, the former government had created special concessions for local and medium scale miners because their businesses can only be owned by Guyanese. But in the case of tourism and other businesses, there was no discrimination based on origin.
Meanwhile, the Private Sector Commission (PSC) is currently seeking legal advice on whether City Hall has the right to implement the $25,000 container tax, even as it awaits a meeting to discuss the issue.
“We are seeking legal advice to determine the legality of their action,” President of the PSC Eddie Boyer had told Stabroek News. He said too that they are awaiting a meeting sought with the council on the matter.
“You know we have written to them seeking a meeting. Well they have indicated to us that they would meet us, so we don’t want to pre-empt what will come out of that meeting. We will wait and meet but in the meantime we are seeking legal advice,” he added.
Although Town Clerk Royston King had told Stabroek News that businesses unloading containers in the city are already being charged $25,000 for the privilege of using the collectively owned space that is the city parapets, Boyer said he was unaware of this.
The city has since met the Georgetown Chamber of Commerce and Industry on the tax.
