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PSC may review its position on VAT – Vice Chairman

Aug 02, 2008 News

The Private Sector Commission will have to review its position on the Value Added Tax (VAT), according to Vice Chairman of the entity, Ramesh Dookhoo.

He made the announcement on Tuesday during the Privatisation and Taxation and Policies seminar, which was held at the Le Meridien Pegasus Hotel.

The statement came in response to a query by chartered accountant Christopher Ram, who noted that when VAT was initially instituted, persons complained that it may be a burden. He said that the PSC did not support the call for the lowering of the 16 per cent rate.

He noted that new information on VAT revealed a 76 per cent over budget revenue and a nine per cent increase in the tax to GDP (Gross Domestic Product) ratio.

According to Ram, VAT, in its first year, accumulated three times more than what Trinidad and Tobago collected in terms of VAT to GDP ratio.

“Does the PSC think it fair that employed persons should pay 1,000 per cent in taxes paid by the self-employed? Those very employed persons expend a higher proportion of their income on items that are then subject to VAT at a high rate.”

According to Dookhoo, the PSC, under its new committee, has to review its old position based on the economic realities. “The commission’s major interest is that of business.”

He said that Ram was a well rounded person when it came to taxation, and as such the commission would like Ram to help the members to be better convinced.

When VAT was announced for Guyana, it was geared to be a revenue neutral tax replacing eight taxes.
All of the opposition parties have, on numerous occasions, called for the revisiting of the rate of VAT, saying that it was too high.

Defending the implementation of VAT, Commissioner General of the Guyana Revenue Authority, Khurshid Sattaur, has said that although VAT has been successfully implemented in many countries, and has given rise to extremely favourable conditions for businesses to operate and, by extension, better prices for consumers, a similar development has not occurred in Guyana.

Sattaur had assured that if one examines the empirical evidence and the facts pertaining to VAT, then there is likely to be a change of opinion from a negative light.

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