PPP used Customs Act to allow tax exemptions on ineligibles

Jul 18, 2016 News

Opposition Leader,
Bharrat Jagdeo

Over the last 40 years the local manufacturing industries have benefited from tax exemptions on raw materials necessary to create their value added products. Despite the Revised Treaty of Chaguaramas (RTC) stipulating which items should not attract exemption, the former PPP/C government had facilitated this using the Customs Act of Guyana.

Opposition Leader Bharrat Jagdeo made it known last Wednesday that his party did not breach the Treaty but rather applied its domestic law for the benefit of its local manufacturers.

Jagdeo said that the Act was used to process inputs into the manufacturing sector. According to the former Head of State, if Guyana is being asked to comply with the list of ineligibles as highlighted in the RTC, then the other member states of CARICOM should justify the subsidies which they grant their manufacturers.

He said that if Guyana is approaching compliance as strongly as it is then Minister of Business Dominic Gaskin should take time out to identify how other jurisdictions treat the list of ineligibles.

Jagdeo said that some CARICOM countries are guilty of providing subsidies to their manufacturing industries particularly in the form of electricity. He posited that for full compliance to be promoted then it must come as a whole and not partially.

“Do you know what the policy in Jamaica is? Whether the manufacturers there get their items duty free too?”

The former Head of State is of the view that before Guyana concedes, it should ask of the other states to come in range of full compliance as well. He said that at the moment, the APNU-AFC coalition is not representing the interests of its people and he credits this to the lack of knowledge on certain issues.

He said that his government had used its local laws due to the knowledge which they had about what occurred around the Region.

The imposition of the import tax on items which are ineligible for exemption under the RTC has been described as a burden on local manufacturers. Jagdeo said that before a total imposition is carried out, negotiations should have been engaged between the Government and CARICOM so as to present a case on behalf of the local manufacturers.

It is not the first time Guyana finds itself in a position where it has to bring itself into compliance with the RTC particularly in the area of trade. On May 8, 2014 the Caribbean Court of Justice handed down a decision in a case between Guyana and the Surinamese company Rudisa Beverages.

That case involved an environmental tax within the Customs Act of Guyana (1995) which the CCJ held to be in contravention with the RTC. The tax charged $10 for the importation of each plastic bottle by the company. According to Jagdeo, the charge was not a tax per se, since it could have been refunded if Rudisa had taken the bottles out of the country.

As it is now, Guyana will have to levy the tax on the ineligible items bringing itself in range with the requirements of the RTC.

The Guyana Manufacturing and Services Association (GMSA) had said that it is working with the Guyana Revenue Authority (GRA) to review the list of raw materials which are ineligible for tax exemptions under the RTC.

The GMSA had stated that the imposition of the tax will result in manufacturers paying more for raw materials. Inevitably, this will lead to consumers paying higher prices for certain commodities.

2 thoughts on “PPP used Customs Act to allow tax exemptions on ineligibles”

george wiltshire July 18, 2016 at 5:38 am

jagdeo can only fool the people he will meet at the bottom house meetings and those who are interested in racism. He had Guyana Times knock off the editor because the papers spoke about the environmental tax and the fact that the president was not using it the way it was intended.
1. Surujpaul Rampersaud July 18, 2016 at 10:47 am
  
  George, you need to address the issue. The man is asking serious questions that can impact the life of ordinary people. You may not like the man but you need to take off your blinkers and ask the minister to respond or I think you are competent to do your own level research. You people talk of social coheasion but this will never be achieved if you are not prepared to listen to the other side. It seems that you want the country to be run the same way it was done in the last fifty years, where the opposition is just blanked out. We will get no where if intelligent people like you continue to hold on to the belief that ” we are on top now. This is our time”.