VAT on electricity is an insult to the poorer classes

Dec 06, 2016 Letters

Dear Editor,
When the Finance Minister in his 2017 budget presentation announced that electricity and water bills will attract 14% value-added tax (VAT) on the consumption of more than $10,000 and $1,500, respectively, from the first dollar, all jaws, rich, poor and the in-between, dropped. It came as a bombshell. It was an unexpected tax, taking into consideration the current government much-touted talk of improving the quality of life of all Guyanese.
How could the quality of life improve when the two most basic necessities of any home; electricity and water, are being heavily taxed? The Prime Minister and Finance Minister, in their post budget press conference, disclosed that their statistics shows that 80% of the consuming public consumes less than $10,000 of electricity per month as such the implemented VAT will only affect the remaining 20%, who presumably are the more affluent of society. By this disclosure, it is then implied that this government is advocating that the 80% consumers who consumes less than $10,000 per month should never aspire to move above their current level of life, where electricity and its use are concerned. This 80% should not dream of having that additional TV in their home, never dream of having even an 8,000 BTU air-conditioning or microwave unit, and never should hope of having a small fridge in their kitchen.
At the same press conference, the two government officials stated that the imposition of the tax on electricity is to encourage conservation. Are they advocating that citizens should take all their lights off in the night when bandits are marauding each and every village in this country, or should citizens use kerosene lamps instead? How could the poor afford solar panels to substitute for GPL power? If one wants to see conservation at its best, pass the government houses in the night on Main Street, Georgetown. It’s as bright as Times Square, New York; not on solar power, but from GPL.
Has anyone consider the domino effect of having 14% VAT imposed on electricity? The cost of manufacturing local goods and the retail prices in stores and shops for even zero-rated items will all be increased, and these increases will be passed on to the consumers, because most manufacturing entities and all shops and stores source electricity from the national grid. In actual fact, the overall cost of living will be increased by 14%. Where is not only the economics, but the simple commonsense in the formulators of this budget?
Editor, I find it extremely distasteful for the current government to make heavy emphasis on the increase in the pensioners’ pay. The increase is 800 Guyana dollars; yes 800 Guyana dollars. It is 26 Guyana Dollars per day. Try giving a vagrant $26 and see if he will accept it. Contrast the pensioners’ $800 per month increase or total $19,000 per month pension to the government’s parliamentary lobbying to pay another pensioner, who is close to them, $1,750,000 per month, and visualize the government’s perception of equality.
If the government is sincerely desirous of improving the quality of life of all Guyanese, then their thinking and perceptions have to change. They need to manage with reality and develop a more caring approach. The draconian budgetary measures on the imposition of VAT on electricity and water, and removal of VAT exemptions from several basic foods such as milk, flour-based products and medications which were all previously VAT exempted, does not exhibit even an iota of care by this government. It’s shameless for the government to raise revenue to meet its expenses by pressuring the poor through taxes, rather than initiating avenues for foreign direct investment, stimulating investments by the local private sector, and encouraging entrepreneurship to generate growth and expansion in the economy. The government is hiding behind too much statistics which are obscuring them from the reality; from crime statistics to now statistics on power and water consumption.
Selwyn Narinedatt

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VAT on electricity is an insult to the poorer classes

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