‘Unjust’ Environmental Tax…Opposition not responsible for US$6M refund ruling – AFC

May 14, 2014 News

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Treasurer and Executive Member of the Alliance for Change (AFC) Dominic Gaskin has taken offence to the sentiments being peddled that the opposition is responsible for Guyana having to refund US$6M ($1.2B) to Rudisa Beverages, a Surinamese company.

The company had taken Guyana to the Caribbean Court of Justice (CCJ) because it felt that the $10 per bottle environmental tax that it was being charged when importing its soft drinks (Thrill) to Guyana was in contravention of the Caribbean Community (CARICOM)’s Revised Treaty of Chaguaramas (RTC) which outlines free trade to signatory countries.
The CCJ ruled in Rudisa’s favour, citing that it had to honour its treaty obligations and ordered that the claimants are entitled to repayment.
The government had argued that it had proposed legislation to rectify the discriminatory effect of the environmental tax, but the proposed amendment was rejected by the National Assembly.
Gaskin dismissed the opinions expressed in the Peeping Tom column of Sunday last, captioned “The implication of the CCJ’s ruling”, in which the columnist opined that “if the combined opposition had passed the amendment to the environmental tax laws, Guyana may have avoided such a harsh judgment from the CCJ”.
In a letter to Kaieteur News, Gaskin said that “it will be recalled that in May of 2013 the government sought to amend the Customs Act by removing section 7 (a) which stipulates the $10 environmental tax on imported containers, and replacing this with a $5 per container tax that would be applicable to local producers as well as importers. This was not approved by the National Assembly for reasons which the political opposition has already explained.”
Gaskin speaking via telephone to Kaieteur News said those reasons were explained by the AFC in their Sunday column by the party’s leader Khemraj Ramjattan, who provided the arguments that were given in the National Assembly for the AFC not supporting the amendment to Customs Act.
Ramjattan had said that “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.”
He outlined further that 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.”
According to Ramjattan “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!”
Ramjattan said “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.”

Ramjattan also outlined “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… 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.” He said for those reasons support was not given to amend the Bill.
According to Gaskin, the Government was collecting money that it had no right to collect and now has to return it. He said further that “whether or not the opposition had approved the new legislation has no bearing on this fact. Had the legislation been approved the government would still have had to refund any monies collected under section 7 (a) of the Customs Act prior to its removal.
“The only difference would have been that the government would presumably have implemented the amendment and ceased collecting this particular tax thereby reducing the US$6 million by whatever would have been collected from that point on until October 24th 2013, which is the date up to which the court has calculated the refund,” Gaskin explained.

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