NAME AND SHAME

Dec 07, 2008 Editorial

The government should not allow itself to be drawn into any name and shame campaign so as to force businesses to reduce prices. The Government of Guyana should avoid the compulsion to enter into such unethical practices.

During the initial start up of VAT, the Guyana Revenue Authority was going around to businesses, monitoring prices. This was not their legitimate function.

The GRA is concerned with the collection of taxes. What businesses choose to charge their customers for products is a function of the market and if the government feels that there is unfair pricing, it can use either moral suasion to address the matter, or it can choose to advise consumers of the prices they ought to be paying or, in the final analysis, the government can seek to regulate prices.

The government, however, should not seek to embarrass any entity that refuses to lower prices. Such practices are unbecoming and end up being discriminatory because inevitably some businesses will be targeted while others will escape.

In a free market economy, competition between sellers should help to drive prices down. However, in some sectors, oligopolistic practices rear their head and a small group of businesses are ultimately able to ensure that prices remain at a certain level.

In such instances, the government can choose different methods of intervening but to seek to include amongst these measures, the naming and shaming of businesses is unethical.

We expect a strong and swift rebuke from the business community to this suggestion to name and shame businesses. It is totally unethical and uncalled for.

It is an assault of businesses and we do hope that good sense will prevail and that this practice does not become a reality.

All this of course has come about because of the signal failure of the government to keep inflation under tabs, as well as to preserve the value of workers’ incomes. In this regard, both businesses and the government must share some blame.

Initially, when the VAT was introduced, there were some teething problems. In many instances businesses were uncertain how to price their goods and thus simply added on to the existing selling price of the item the 16 per cent rate of VAT.

Prices rose and this increase coincided with a rise in global food prices as well as critical inputs into the agricultural sector.

The government tried some interventions such as a subsidy of flour prices in an effort to hold prices in check. They also reduced the tax on fuels but consumers still paid more because of the steep increases in global prices.

Now that these global prices are falling, the government, faced with its inability to compensate its own workers for the high inflation rate of last year and an anticipated eight per cent inflation rate for this year, is seeking to have prices in the markets reduced.

The government’s approach, however, has been open to criticism. While it insisted that minibus operatives reduce their fares to the old level and worked with the minibus associations to ensure this happened, it has failed to set recommended prices for bread, leaving the decision up to the bakers themselves.

What is needed in Guyana is a strong surveillance within the Ministry of Trade, Industry and Commerce that would monitor the prices of a critical basket of goods used by consumers.

It would be asking too much for the Ministry to monitor too many prices but at least for things such as oil, butter, rice, sugar, milk, bread, biscuits, potatoes, onions , peas, chicken, eggs and beans, the government should monitor closely the developments in the market to ensure there are no supply kinks and more importantly that consumers are not exploited.

Latest News

NAME AND SHAME

Related

Similar Articles

The Glenn Lall Show|| February, 14th, 2025

Follow on Tik Tok @Glennlall

THE BLUNT OF THE DAY

Sports

Slingerz FC shines at Guyana Energy Conference and Youth Forum

Guyana’s rising Chess stars take on Barbados

Elite clubs will challenge KFC monopoly on team...

Bristol named manager as Guyana gears up for 2025...

BCB puts a halt to cricket season due to...

Changes made to KMTC Phagwah Horse race meet

Features/Columnists

The clock and the cloud

CARICOM Nations Should Respond Together To new U.S. Policies

Wood snake year

Publisher’s Note

Weekend Cartoon

Bridge Watch

Demerara Harbour Bridge

> Berbice Bridge […]

NAME AND SHAME

Share this:

Related

Similar Articles

The Glenn Lall Show|| February, 14th, 2025

Follow on Tik Tok @Glennlall

THE BLUNT OF THE DAY

Sports

Features/Columnists

Publisher’s Note

Weekend Cartoon

Bridge Watch

Demerara Harbour Bridge

> Berbice Bridge […]