CCJ ruling on Environmental Tax…Absolutely no funds in our estimates to provide for this payment – Tax Chief

May 12, 2014 News

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By: Kiana Wilburg

Commissioner General of the Guyana Revenue Authority (GRA) Khurshid Sattaur has made it pellucid that the Authority is not in a position to pay the $1.2B refund to Surinamese Company, Rudisa Beverages.
The Caribbean Court of Justice recently handed down a decision in which it ruled that the environmental tax collected from the company by the GRA contravened the Revised Treaty of Chaguaramas (RTC).

However, Sattaur insists that the ruling of the court was not catered for in GRA’s estimate.
The company, which manufactures Thrill soft drinks, had previously argued that it did not agree with the tax, as both Guyana and Suriname are part of CARICOM, which allows for non-tax trade.
Guyana was also ordered to take the necessary measures to prevent the collection of the environmental tax on goods of Caricom origin. Guyana had explained to the CCJ that it had attempted to rectify the tax in Parliament by way of a Bill but it was voted against by the Combined Opposition who reportedly argued that the measures would have affected local companies competing with Rudisa and that there was need for consultations.
The CCJ did not accept this excuse and made it clear that Guyana has an overarching responsibility to honour treaty obligations.
When Sattaur was contacted yesterday to comment on the CCJ’s decision on the Environmental Tax and whether the Opposition should be blamed for this fiasco, he categorically stated that the Guyana Revenue Authority (GRA) does not wish to get dragged into any kind of contention and will stay away from the politics involved.
He however said, “I respect the CCJ’s ruling but we have to find ways of dealing with it as it has major implications. First of all, there are absolutely no funds in our estimate to provide for this payment as we never anticipated this kind of decision from the CCJ. I am not a lawyer but I will be consulting with them to determine if anything at all in the decision can be challenged.”
The Tax Chief said, “Another way of looking at it too is, suppose the company argues that it reduced its profit margin by having to absorb the Environment Tax charged by the Government in order to stay competitive with the local companies that are not charged this tax? Then this refund of the tax will be tantamount to an earning of profit and I will have to re-examine its corporate tax liability and probably it’s VAT Liability as the spinoff issues pertaining to the payment of the refund.   I am not questioning the court’s decision but I am just trying to live with it and to rationalize it with the bigger picture.”

Sattaur said that it would be interesting to see what the one seat majority opposition will do when the Minister of finance, Dr. Ashni Singh approaches the Parliament for funds under supplementary provision to honour Guyana’s obligation to the court’s decision.
He added too, “There is the moral issue of this decision that our local beverage manufacturers should capitalize on and request that every consumer who would now be entitled to a refund of the overcharging of the cost of acquiring the beverage in the past from this particular beverage company and to stage a massive countrywide boycott of the product if this is not done. The company must put mechanisms in place to repay consumers in excess of $1.2 B it would be receiving from the Government. This decision has the effect of giving the CCJ authority over the jurisdiction of the Parliament to make laws.”
Prime  Minister Samuel Hinds has expressed that the Combined Opposition can in no way now, escape blame for the fact that the Government of Guyana now has to pay $1.2B to refund Rudisa Beverages. During a telephone interview yesterday, Hinds said, “The government introduced a Bill in Parliament which sought to regularize and remove this situation which we have landed in. That Bill as you know was defeated by the Opposition. Considering what has happened, the Opposition cannot escape blame for this situation.”
However, A Partnership for National Unity’s (APNU) Shadow Minister of Agriculture and the Environment, Dr. Rupert Roopnaraine, said that now is not the time to allocate blame, but rather to find the best solutions to the situation.
Roopnaraine informed this publication yesterday that he will propose to his colleagues during their Tuesday meeting to have a possible meeting with the government on how best the matter can be resolved.
Supporting Roopnaraine’s comments was APNU’s Shadow Minster of Public Works and Telecommunications, Joseph Harmon.
Harmon said, “Sattaur needs to understand that there is no room for further appeal. All that money the government has hidden in secret accounts and they are saying that they don’t have money to repay the people? I don’t understand how he could say that they don’t have money when the GRA is the largest revenue collecting body in the country.”

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