Increase in revenues, reduction in VAT need explanation

Jul 18, 2016 Letters

Dear Editor;
Recently, the Minister of Finance announced that the Central Government saw an increase in revenues at the end of April, 2016. This increase was for the period January to April as compared to the same period last year. The Minister went on to state the reasons for the increase in revenues. KN July 13, 2016.
It is very obvious why revenues are on the “up”, – increased taxes, increased duties on every possible commodity. These increases have a profound effect on the average citizen. The people of Guyana saw increases in fees that were directly passed on to them. Hucksters who travel with a motor vehicle will have to pay $62,500—which is a far climb from the $5000 they were obligated to pay prior to the amendment.
Hucksters who travel on foot with a man-propelled vehicle or cycle will now have to pay $3500 instead of $280; hucksters who travel with a horse or other beast bearing or drawing burden are mandated to pay $12,500 instead of $1000 they previously paid for their licences.
KN March 30, 2016. Some of these increases are in the region of a 12 fold. This is an ominous indication that the Coalition is (and) will be placing a heavy burden on the citizens with taxes and fees. These and other increases have an adverse effect on the citizens spending ability. This is very evident within the past year. We witness the inability of the average citizens to even afford the basic.
However, as the Minister stated, VAT revenues declined. As he stated, a decline compared to the levels achieved to the same period of 2015. This is the troubling part of any economy. In simple terms, it is (or could be) easy to have an increase in revenues by increasing taxes.
But when workers are burdened with increased taxes, fees and duties, their ability to spend on the most basic commodities is greatly reduced. This without a doubt will generate less Value Added Taxes. It does not take a “genius” to sum up the direction we are heading.
The VAT reduction is a barometer of the direction the economy is heading. VAT (Value Added Taxes) is generated, (collected) when consumers spend. When the people have the ability to reach into their pocket and make purchases, the Government gets the resulting VAT. It is obvious that revenues are not being generated by production in our country (gold seems to be the only shining star).
We all know that taxes, duties and fees are essential. I am not complaining or canvassing for their abolition. But unless the Coalition comes to the realization (the sooner, the better) that taxation will never solve our problems, the sooner Guyana will be pointed in the right economic direction.
Muhammad Raoof
USA

Discover more from Kaieteur News

Subscribe to get the latest posts sent to your email.

Latest News