Govt. considers review of Barama’s tax concessions

Nov 02, 2010 News

– $25,000 ‘computer classes’ stipend offered to ex-staffers

By Leonard Gildarie

Government has signaled its intentions to review and possibly scrap most of the tax concessions offered to Malaysian-owned Barama Company Limited (BCL) if the company’s plywood-making does not resume as soon as possible.
The disclosure was made yesterday by President Bharrat Jagdeo as he met with workers of BCL who were laid off following the closure.
The Head of State also announced a $25,000 monthly stipend for the affected workers but this is dependent on them taking weekly computer classes for the next 12 weeks.
The stipend is expected to cushion the impact faced by workers who were suddenly given notice that they no longer had jobs.
Many of the 274 workers sent home have been with the company for over a decade and an estimated 30 families were living at the worksite at Land of Canaan, East Bank Demerara.
Yesterday, in a meeting with workers at the International Convention Centre at Liliendaal, East Coast Demerara, the President explained that initially BCL were granted tax concessions that were contingent on their value-added productions, which included plywood manufacturing. With the factory now closed because of a boiler shutdown last month blamed on negligent staffers, Jagdeo noted that the arrangements may now be reviewed.
BCL in a recent report to government said that plywood manufacturing was an integral part of its operations and it is now examining several options of bringing the closed facility back into operation.
However, repairing the boiler, the component that was damaged, or even replacing it, could take at least 18 months.
Currently, the company is not required to pay corporate taxes under its concessionary arrangements in the deal it had brokered with government when it started operations back in the early ‘90s.
Regarding the $25,000 monthly stipend, the President explained that it should not be viewed at a mere handout. Rather, with government intending to equip 90,000 families within three years with laptops, the affected BCL families who want to collect the $25,000 will have to “work for it”.
Under the program, the workers will have to attend computer classes once a week for the next three months.
Persons already with jobs may not benefit, the President advised. The official also offered to have participants of the program take another course if they can prove that they are already computer literate.
Also at the meeting were Minister of Labour, Manzoor Nadir, Minister of Agriculture, Robert Persaud and General Secretary of the Guyana Labour Union, Carvil Duncan. GLU is the bargaining union for BCL’s employees.
The workers could start receiving monies as early as this month-end, once they can prove that they attended computer classes.
According to Jagdeo, the workers can also apply for other government programs, including ones for single parents and low cost housing grants.
Responding to questions from the workers, the President also took a jab at some judges whom he accused of being “lazy” with some tax cases against large companies left hang up in courts for up to 10 years.
He also assured workers living at the Land of Canaan site that they will be given time to move but admitted that there is not much more that government could do in this regard. Some of the workers live as far as Linden.
Early last month, the company’s boiler, a component that is integral to the production of plywood, was damaged with four workers blamed for being negligent.
With repairs or replacement likely to take an estimated 18 months, BCL said that it had no choice than to lay off the 274 workers who were directly employed in the operations.
The fallout was immediate with suppliers of peeler logs, used to make veneer sheets, which are then inserted in the plywood, immediately seeing their livelihoods disappear overnight.
An entire industry that grew around the peeler logs, including transportation and fuel supplies, were also affected with authorities expressing concerns over how the construction industry would be affected.
BCL has since said that it is contemplating importing plywood but the shipping and logistic cost may be prohibitive.
The company is also examining possibilities of installing a smaller boiler to meet demands of the local market but this may take up to five months before realization.
The company has said it only has a few weeks’ supplies of plywood, a critical construction material.

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Govt. considers review of Barama’s tax concessions

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