Suspend VAT for 12 months, reduce GPL tariffs -AFC

Nov 27, 2008 News

The Alliance for Change has called for an immediate suspension of the Value Added Tax for a period of at least 12 months or a period to be determined until the world’s financial crisis abates.

This call, according to the AFC, is being made in light of the fact that the global financial crisis will have a negative effect on Guyana, which is already in a state of recession.

AFC Executive member and Member of Parliament, Sheila Holder, also said that there needs to be a reduction of the Guyana Power and Light (GPL) tariff on the basis of the reduced price of oil on the international market.

She said that it was the government’s argument that the cost of supplying electricity was increased because the cost of fuel and lubricants had risen astronomically.

“What then could account for the strange behaviour of not behaving responsibly, other than a calculated plan to rob struggling citizens of hard-earned cash?”

According to the Mrs Holder, the AFC is firmly of the opinion that the worldwide financial crisis would definitely affect Guyana in more significant ways than the government has stated and would wish Guyanese to believe.

She noted that the Government must also be honest on its pronouncements on the issue, adding that the contagion effects of the global financial crisis cannot and would not escape Guyana.

She posited that Guyana is already beginning to see signs of economic recession as remittances on a steady decline; the falling away of gold and diamond prices, the reduced world market demand and falling prices of Guyana’s primary export products such as rice, sugar, bauxite and timber products, and the marked decrease in spending power of the Guyanese working class; much to the consternation of the business community, especially at this time of year.

“The indicators of recession have definitely arrived in Guyana…Levels of unemployment are also increasing and many who expected to obtain temporary employment during the Christmas season have been disappointed.”

The Executive Member emphasised that government has displayed naivety, complacency, and bankruptcy of ideas by simply informing the public that the local financial system is sufficiently insulated from “the shocks and tremors of this Global crisis.”

This position by the government was in stark contrast to the situation in other Caribbean countries whose governments and stakeholders have already begun examining ways of staving off the harsh effects of the ongoing Global financial meltdown.

“In this regard, a multi-partisan approach initiated by the Government to address the inevitability of the affects of this financial crisis on Guyana is the only strategy towards finding a local solution.”

It was suggested by the party member that the present administration should follow the lead of other countries by convening a dialogue of relevant national stakeholders.

“The government needs to drop the pretence and take the bull by the horns to alleviate further burdens and hardships on hard working Guyanese.”

As it relates to the call to suspend VAT, she pointed the Government in the direction of the United Kingdom where it was recently announced by the Gordon Brown government, that with immediate effect the VAT rate was being reduced from 17.5 per cent to 15 per cent, which was expected to place an average of £10 into the hands of every UK citizen.

Party Chairman, Khemraj Ramjattan told this newspaper that the government should also implement with immediate effect a stimulus package.

He noted also that the president was giving the impression that the administration could not do what is happening (stimulus packages) in other countries because Guyana was not suffering. “Guyana is permanently in recession…We must take in the context of who the president is giving economic packages to.”

He noted that one of the biggest economic package was given to the Queens Atlantic Investment Incorporated (QAII), “They got tax holidays…they got tax concessions…they got a huge piece of prime property with infrastructure that was sold for next to nothing…that is an economic package to one of his favourites.”

Ramjattan also pointed to the fact that the recent deal inked with BOSAI was also an economic package in that the company will have a ten-year tax holiday.

He questioned what was so wrong with the average worker and citizen to get a temporary relief, “They can afford it…they collected double the amount last year.”

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