Berbice Bridge toll lowered, but VAT still to be reduced

Aug 11, 2015 News

By Abena Rockcliffe
While the government has made good on its promise to reduce the toll attached to the Berbice River Bridge, it wasn’t in a position to deliver on the one to reduce Value Added Tax (VAT).
However, in the absence of the latter reduction, government announced that it has extended the VAT zero-basket to include a larger number of food and household items.
As he presented his budget yesterday, Minister of Finance Winston Jordan said that Guyanese will not see the phased reduction of the current 16 percent VAT in the 2015 National Budget as was promised in the coalition’s elections manifesto. However, Jordan said that his government has committed to several other tax reform initiatives.
In addition, a number of food and household items will now attract zero percent VAT.
These items include yogurt, cereals, fresh carrots, milo and ovaltine, nestum, mustard and mayonnaise, locally-produced fruit juice, locally-made chowmein, vinegar and household cleaning agents.
To cushion the disappointment of the absence of VAT reduction, Jordan announced that there will be a reduction in the fee to cross the Berbice River Bridge.
“With effect from September 1, 2015, the toll for passenger cars and buses will be reduced from $2,200 to $1,900, a 13.6 percent decline. At the same time, the toll for all other types of vehicles will be reduced by 10 percent. “
At the same time, the toll for all other types of vehicles will be reduced by 10 percent.
The Finance Minister said that over 150,000 Guyanese live within Regions Five and Six and traverse the Berbice Bridge to access education and health services, conduct business and travel on a daily basis, and thousands more traverse the bridge annually.
He told the National Assembly, “This Government has heard the cries of the people and will alleviate the burden of the high fares imposed on them. I am pleased to inform this House that the lives of the citizens of Regions 5 and 6, and indeed all Guyanese who travel to the Ancient County, will be improved as a result of the implementation of the first of a phased reduction in the Berbice Bridge Toll.”
While the regular commuters of the Berbice River Bridge will be delighted by this announcement, a total opposite reaction is expected from the Private Sector. That sector is against the reduction in toll on the basis that such a move would only put the future Public/ Private Partnership in jeopardy.
But the new government is floating the idea of a subsidy for the Berbice Bridge Company so as to offset the cost of the reduction.
Minister of Governance, Raphael Trotman is quoted in the media saying, “Government is going to negotiate with the company, the idea of perhaps a subsidy that would ensure that the tolls are lowered. We have no intention of interfering with companies’ right to a rate of fare and a favourable rate of return on their investment. But we believe as a responsible government, we do have a right to represent the people.”
In an open letter to the media, Dr. Janette Bulkan, a forestry expert, had urged that politicians be cognizant of the mistakes Guyana made in the past as it relates to project investments.
Bulkan had argued that the only beneficiaries of the Bridge were the business people who benefit from a high toll. She had said, “While the Berbice River Bridge was being constructed, the majority of poor Berbicians might have thought that they would be paying the same toll as the Demerara River bridge commuters. They lost corn and husk: there is no alternative cheap ferry. They must use the Berbice River Bridge. Wealthy investors are the principal beneficiaries of that bridge; the State has been foregoing revenues so that the privileged investors can earn dividends.”

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