Latest update January 7th, 2025 4:10 AM
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Rudisa Beverages offers to drop case if Guyana amends discriminatory law
…opposition stance cost nation US$6M – Attorney General
The Guyana Government will have to return to Parliament to amend the discriminatory Environmental Tax which recently caused the Caribbean Court of Justice (CCJ) to award a judgment in the favour of the Surinamese company, Rudisa Beverages. The court awarded US$6M to be paid by the Guyana Government.
This was confirmed by Attorney General, Anil Nandlall, who yesterday said that Government will firstly seek to negotiate a resolution with the Surinamese makers of the ‘Thrill’ drink which had moved to the courts against Guyana.
A Thrill drink that attracted an environmental tax
Guyana passed the Act in 1995 permitting the Guyana Revenue Authority (GRA) to charge a tax of $10 on each bottle of the drink imported into Guyana.
Nandlall said that in 1995 when the law was introduced, it was not discriminatory but this changed when the Caribbean Community (CARICOM) Revised the Treaty of Chaguaramus.
He said that this was the case across the region in that several other countries also had to amend their laws to be compliant with the revised treaty.
According to Nandlall, when the Guyana Government moved to the Parliament to amend the law, it was shut down by the political opposition.
The Attorney General did point out that what is important to note is that the Surinamese Company had approached him and had indicated that it would withdraw the case against Guyana, should the law be amended.
According to Nandlall, this was communicated to the Caribbean Court of Justice, which at the time adjourned the matter in order for Guyana to get its house in order.
Nandlall said that the opposition at the time requested time to consult with local beverage producers among others but prolonged the issue.
He said that the CCJ had offered Guyana an extension of time in order to allow the country to amend the laws but when it was shutdown in Parliament the CCJ was forced to make its ruling.
Asked whether the State will continue to impose the tax in light of the ruling, Nandlall said that a decision has not been taken on how the matter will be handled between now and when the law is amended.
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.
Rudisa argued at the CCJ that the legislation violated the trade policy contained in the Revised Treaty of Chaguaramas, in particular the free movement of goods and the prohibition on import duties on goods that are of CARICOM origin.
Both Guyana and Suriname are members of CARICOM. Rudisa, through CIDI, has been in Guyana since 2007.
According to the CCJ, in its judgment, Rudisa’s application was based on the provisions of the Customs Act of Guyana which imposes an environmental tax on all imported non-returnable beverage containers. The legislation does not contain any exemption in relation to CARICOM goods.
The Surinamese company claimed that no similar tax is imposed on local producers of non-returnable beverage containers and, by the definition of “Import Duties” laid down in the Revised Treaty of Chaguaramas, the levy must be regarded as an import duty.
The issue of the environmental tax was first raised with the Council on Economic Trade and Development (COTED), the trade arm of CARICOM, by the Government of Suriname in a series of meetings spanning the period 2001-2012.
COTED concluded that in so far as it applied to CARICOM goods, the levy was in breach of the Treaty which governs how the member countries would operate in a trade environment.
Guyana, in turn, committed itself to take the necessary action to eliminate the discriminatory effect of the environmental tax.
The Government of Guyana brought legislation to the National Assembly in 2013 to amend the Customs Act but the proposal was rejected.
The claimants filed an application with the Court alleging that the imposition of the environmental tax is a breach of the Treaty.
They argued that the tax is inconsistent with CARICOM trade policy which provides for the free movement of goods and prohibitions on the imposition of import duties on CARICOM goods.
According to CCJ, Guyana had admitted that the tax is inconsistent with their obligations under the Treaty but notes that the Government has proposed legislation to rectify the discriminatory effect of the environmental tax, but the proposed amendment was rejected by the National Assembly.
The government also argued that the aim of the legislation is environmental protection, which is a fundamental right under the Constitution of Guyana.
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