Unfair competition between Chinese and local businesses

Mar 18, 2012 Letters

Dear Editor,
I wish to inform the relevant authorities and the public at large of a particular situation which is occurring at many of the Chinese owned businesses in Guyana, especially in Georgetown.
My concern stemmed after witnessing a conversation between two Chinese Nationals and a gentleman who appeared to be a business advisor, about the charging and remittance of VAT.
The Chinese Nationals informed the store owner, whose business is registered to administer VAT, that they do not need to charge or remit the compulsory tax to the Guyana Revenue Authority. Now what is appalling is that the gentleman whose business is also on Regent Street was saying that all Chinese Stores’ aggregate sales amount to more than the limit of $10M per year, yet they do not charge the compulsory tax because “that is the way they have been operating ever since they opened their businesses and Guyana Revenue Authority has never visited them to advise otherwise”. Additionally it was stated that the amount was too “minute and insignificant for GRA to bother with”.
This situation is of grave concern since the local businesses have to comply with the law especially with those pertaining to taxes including VAT, Income Taxes, Property Taxes and PAYE, and Insurance contributions to NIS.
Now, if a business which is owned by a non-resident fails to adhere to these laws, it creates an unfair trading environment, as local companies/ businesses who comply with the VAT laws are placed at a disadvantage due to higher re-sale prices for their products. This also places additional pressure on the local businesses that have to operate in a highly competitive business environment.
One does not need to have a PhD in Economics to recognize that our country is being robbed on a daily basis since these profits earned are significantly underestimated, and the mass of the money is being shipped to their country of origin. This is affecting our economy tremendously as the money is not being utilized to uplift standard of living e.g. increase wages for staff, capital investment, donations to the local community etc.
In addition, these Chinese nationals and also other nationals after entering our country, immediately register their businesses without prior approval from the Ministry of Home Affair. This is absurd as they do not have the requisite permission to establish these businesses, i.e. Work Permits or Business Visa.
These businesses operating expenses are well over $1.5M monthly, hence it would be absurd for them to justify that their gross revenue is below $10M per annum, especially, since their rental accounts for 90% of their administrative expenses.
I wish to categorically mention, that the Guyana Revenue Authority can collect more revenue for the country if it enforces the law on a more consistent basis. In light of this, I as a law abiding citizen in the country of my origin, demand from the relevant authorities especially the Ministry of Home Affairs, Guyana Revenue Authority and National Insurance Scheme to enforce the law without partiality to every individuals who wish to operate/ conduct a going concern.
I wish to also advise that when an application is made for Business Visas or Work Permits to the Ministry of Home Affairs that they should ensure that a NIS Compliance is issued as a collaborative effort to curb the situation, since a lot of people take this institution for granted.
I also call on the Guyana Revenue Authority to immediately conduct an audit on these stores to ensure that they comply with the law, and charge those who are in breach since ignorance of the law is no excuse. I will be following up this issue closely since it is extremely unfair to the local citizens and businesses of this country who have to comply with the law.
I also call on the parliamentarians to ensure that these laws are being enforced and no partiality is given to anyone. The local business community should also pay keen interest to ensure this situation resolves itself as they are the ones affected significantly.
Concerned Citizen

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Unfair competition between Chinese and local businesses

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