What a hazard…that Environmental Tax

May 11, 2014 AFC Column, Features / Columnists

---

(An edited, modified version of Khemraj Ramjattan’s address in Parliament on the Customs (Amendment) Bill 2013 – Bill No. 2/20130)
Thank you very much Madam Deputy Speaker. The repercussions of not having this Bill passed ought to be understood by the Government, but apparently it does not want to. In that context then, when an Opposition, and a majority at that, requests a deferral, and the Government persists in pushing ahead with the Bill, it indicates that the Government does not appreciate the necessity for consulting, and the necessity for us and the public understanding all the issues.

Now they are pleading with us, “Please, the passage of the Bill has implications for Guyana under the Treaty of Chaguaramas, and rights and obligations under the Caricom regime”. Also, they plead, ad terrorem, to us that they have litigation presently in the Caribbean Court of Justice that might very well jeopardise this country financially if we do not pass this Bill.
I want to let this Parliament know that we in the AFC understand and appreciate those arguments. But the Alliance for Change says that a tax is a tax! That is what this Bill is all about. This Government only wants to tax its people making us the most taxed country in the English-speaking Caribbean.
The tax with which the principal Bill here is concerned is extraction of a $10 import duty for every bottle of beverage that comes into this country. There were and are implications in relation to this tax. These implications have been brought to the fore now that certain beverage companies in Suriname and Trinidad, being affected by this tariff, have instituted legal proceedings in the CCJ.
This Government well knew that it was violating treaty obligations when it caused this $10 per bottle tariff to apply to and affect non-Guyanese manufacturers in Caricom. But it was glad for the billions it brought in to its coffers and did not care about the legality.
The Government, instead of completely repealing this $10 per bottle environmental tax, runs here to fast-track a solution which now has an implication for our Guyanese manufacturers of bottled beverages. And, I daresay, further implications for consumers here in Guyana who would want to purchase these bottled beverages.
What this Government now wants to fast-track will jeopardise our local manufacturers. This it does by deviously stating an argument that goes thus: “Look, instead of the $10 per bottle we now extract as an environmental tax from the foreign manufacturers, we are now going to charge those people from outside $5 and our local manufacturers will have to pay the other $5”. This is what this Amendment is all about!
That is not how I view how an investment climate should be fostered for our local manufacturers. I view it that if indeed there is a need for the environmental tax, let us drastically reduce it from this $10 per bottle and let it be applied across the board. But it has to be low enough to, firstly, be accommodating to our local manufacturers; and, secondly, not to disgruntle the CARICOM manufacturers.
I spoke to a number of our top local businessmen and they are not in support of this Bill. They are saying that it is an additional tax of $5 on every bottle. This Government will say nothing about the sentiment of the local businessmen concerning this Bill. In this case it will hide all that. But it will abundantly use NCN to say how the private sector feels about the Anti-Money Laundering and Countering the Financing of Terrorism Bill though!
I want to ask the question: “Where have all the monies gone which were collected thus far since the introduction of this environmental tax amendment under this Customs Act?”
This Government collects $1.1 B almost every year since the tax was imposed. When we see what is happening in Georgetown, all that garbage and all that environmental hazard, we wonder whether what was collected is ever used. A little rain fell the other day and the whole, cursed city stinks!
The businessmen who we spoke to, the manufacturers in the Private Sector Commission, and those in the Chamber of Commerce, and even in other places, privately and at social events such as cocktails ask: “Where is that money going to, Mr. Ramjattan?”
I say to them, “I really do not know where it is going. But why don’t you ask President Ramotar when next you engage him on the Anti-Money Laundering Bill?” The discussion abruptly ends, invariably.
The trouble is that we now have this kind of pitiful argument coming: “Oh, we are going to breach our treaty obligations if we do not get this National Assembly to pass it.” Utter nonsense! Treaty obligations have already been breached!
I want us to understand that as a party on this side of the House, the Alliance for Change, we will not be induced or pressured by those arguments at all. We will bring the entirety of the issue to the public of Guyana at the appropriate time when it will matter.
But let the ordinary cane-cutters and rice farmers and workers know what this Bill means to them. Let me tell you, Honourable Attorney General, what it means to them. When you put that $5 per bottle on the Guyanese manufacturers it is the consumers that will have to pay more. But you do not want to tell them, the cane-cutters and the consumers, that. You do not want to indicate how significant that is an implication. No, this Government does not want to say that. Manufacturers do not like to take increased costs. They like to pass increased expenditures in production on to others. So this $5 a bottle will go down to the consumers. Consumers will have to pay more. Every little school child who wants a bottled beverage for his enjoyment or nutrition will have to pay more on the passage of this Bill.
For these reasons then, this Bill is not going to get AFC’s support because as I said, a tax by any other name remains a tax. And this is what this Government loves to impose on its people, more taxes to cause them to suffer from higher prices as a result. For the sake of the people out there, the consumers and the manufacturing class, we are not going to support this Bill. Thank you very much, Madam Speaker.

---

---