GRA refutes Ram & McRae findings on VAT

Jan 07, 2009 News

Commissioner General of the Guyana Revenue Authority (GRA) Khurshid Sattaur yesterday disputed reports by Ram and McRae which quoted respondents of a recent survey conducted by that firm, as saying that the Value Added Tax (VAT) has made it difficult to compete with other businesses.
The Commissioner General stated that the accounting firm needs to stop misleading the public by sanctioning inaccurate reports.
He said that complaints about VAT being too high, resulting in companies becoming less competitive, emanate because companies are now under the microscope with regards to their tax payments that are no longer concealed under the consumption tax.
He said that VAT allows for a more transparent system of taxation where companies are accountable to the GRA for VAT attached to their products. He said consumers are now protected from exploitation since the amount of VAT charged by the suppliers have to be paid to the GRA and this is restricted to 16 percent on certain items.
Sattaur reiterated that the 16 percent VAT which was introduced in 2007 has resulted in consumers paying less than what they were paying previously in consumption taxes which ranged between 10 to 30 percent.
According to Sattaur, before the implementation of VAT, consumers were charged consumption taxes on items which were implied within the cost of the commodity so they were unaware of the exact percentage of taxes they were paying. However, with the implementation of VAT, consumers are aware that they are being charged a 16 percent tax on certain items and though in effect they are now paying less, because they are aware of that figure, they tend to think that they are being charged more.
This, he, said has provided a more effective method of revenue collection giving consumers the opportunity to see the percentage of tax they are paying on items, in comparison to the previous system.
When VAT was implemented Government moved to reduce the impact on consumers by labelling as zero-rated items all medical services, prescription and over the counter drugs, water and sewage services, educational materials and services, rent, local building materials, gasoline, dieseline, cooking gas, kerosene, electricity, and basic food items among others.
The Value-Added Tax has also replaced Service, Telephone, Hotel Accommodation, Purchase, Entertainment and Consumption Tax and ensures that everyone who benefits from Government’s social services pays a fair share of taxes.

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GRA refutes Ram & McRae findings on VAT

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