Taxation on imported materials is part of CARICOM’s CET

Jul 16, 2016 News

Minister of Finance, Winston Jordan

Amidst condemnation by local manufactures over Government’s decision to implement taxes on imported raw materials, the Minister of Finance, Winston Jordan, has stated that the implementation is in keeping with the Caribbean Community (CARICOM)’s Common External Tariff (CET).
The Minister told the Government Information Agency (GINA), that this is not contrary to what is happening in other countries that are paying under the Treaty of Chaguaramas.
He added, “The fact that we had been delinquent in the payment doesn’t mean that it is right to continue.”
Recently, members of the Guyana Manufacturing and Services Association (GMSA) met with representatives of the Guyana Revenue Authority (GRA) and the Ministry of Foreign Affairs on this issue. Manufacturers had stated that they will be making plans to lobby the Government to reverse its decision.
The manufacturers are contending that for years they have been able to import raw materials without having to pay import taxes. In essence, the application of the import taxes which were never applied until a few months ago will make goods manufactured here more expensive and uncompetitive.
Jordan stated, “It is a local manufacturer who drew it to our attention and once that became known, we couldn’t just ignore it because we don’t know what would have been the subsequent consequences of having been told and us not acting on it. They could have complained further. They could have complained to CARICOM because they themselves were being affected by the particular Act,” Minister Jordan explained.
The People’s Progressive Party/Civic government was taken to the Caribbean Court of Justice in May 2012 by Rudisa Beverage Company. The Surinamese company cited unfair treatment under the Caribbean Single Market and Economy (CSME).
“The last time we failed to enforce the law or treat people equally; it cost us about $1.5 Billion. If you remember the Rudisa case, we also have, I believe, a case outstanding with the Trinidad Cement Limited (TCL) where we failed to impose the CET for cement that came extra- regionally some years ago. TCL took us to court,” the Minister reminded.
The Minister said that while Government cannot arbitrarily grant relief from the CET, it has met with the Guyana Manufacturers’ and Services Association (GMSA), and indicated its readiness to approach the Council for Trade and Economic Development (COTED) for exemptions on raw materials for local manufacturers.
A list of raw materials has been requested from the GMSA, which upon receipt, submission will be forwarded to the Ministry of Finance for representation to be made to CARICOM for relief to be granted by COTED. Minister Jordan further expressed Government’s willingness to explore other ways through which the local manufacturing industry may receive relief from the effects of the taxes being imposed.
“It is not a local tax; it is under the Treaty of Chaguaramas and is required for all members of CARICOM. We just can’t sit and cry over something that is not a government imposition and should have happened before. Let’s knock our heads together and see perhaps where relief can be given in another area. The government is not averse to looking at any suggestion in that area,” the Minister pointed out.

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