Chief Executive Officer of Sterling Products Ltd Ramsay Ali on Wednesday evening told the Stabroek Business that local manufacturing is likely to continue to perform below its potential unless government moves decisively to address the taxation of fuel and by extension, the enhancement of the competitiveness of the sector.
Speaking on the sidelines at the company’s Annual General Meeting at the Marriott Hotel, Ali said that apart from the need to reduce taxes on fuel, government needed to take other measures to better position the manufacturing sector to perform at its optimum. “It would do the sector some measure of good if the present administration were to take the position of its predecessor in reducing taxes on fuel whenever there is an increase in price,” Ali stated.
The Guyana Manufacturing and Services Association (GMSA) executive member told the Stabroek Business that bilateral discourses between government and manufacturers on the issue of cutting taxes on fuel had gone nowhere “despite the fact that we have submitted a great deal of information to the administration on this issue …They have everything that they require on issues like usage and consumption to position them to make an informed decision,” Ali disclosed.
The CEO’s call for government to make tax concessions to the manufacturing sector came in the wake of a disclosure in Sterling Products’ 2018 Annual Report that the company had suffered a 30% reduction in after-tax profit which it said was due in large measure to inexorably climbing fuel-related operating costs.
The Sterling Products head also questioned the exemption of the manufacturing sector from fuel tax concessions granted to both the mining and fishing sectors. “Here again the sector has provided government all of the information that it has required to help make a decision and still nothing,” Ali added.
Meanwhile, the manufacturing sector executive criticised what he said was the indifference of Caribbean Community governments to affording a wide range of extra-regional manufactured products into the region under circumstances that afforded evasion of the Common External Tariff. In this regard he singled out animal fats, key ingredients in the manufacture of products here in the region. “We are not embracing a protectionist policy here. We believe in competition but the reality is that the prevailing inattention to the unfair pressures that are being imposed on the manufacturing sector by key imports that land in the region without attracting taxes means that our ability to compete continues to be seriously impaired.”
When asked to assess the overall state of the country’s manufacturing sector Ali said that he was concerned about the sector going into a “tailspin.” Asserting that the country was witnessing a circumstance in which it was having to deal with increasing volumes of manufactured goods, Ali said that he considered it a far from encouraging sign, “The reality is if the trend continues we may well arrive at a point where we could cannot compete and therefore can be pushed out completely. We should be protected in order to be in better position to compete.”
