VAT changes…Chicken prices will escalate with new budget

VAT changes…Chicken prices will escalate with new budget – poultry producers

Dec 07, 2016 News

New measures proposed in the 2017 Budget will result in a significant increase in the price of chicken to the consumer and may well destroy the local livestock industry, stakeholders claimed yesterday.
Under the new measures announced, in the recent budget presented by Finance Minister, Winston Jordan, day old chicks would be changed from zero-rated to exempt while livestock feeds would be standard rated (instead of zero rated) and therefore be taxed 14 percent Value Added Tax (VAT).
Under previous tax arrangements, manufacturers were able to claim back from the Guyana Revenue Authority (GRA, the VAT paid on the inputs used. However, an entire list of items is being moved from zero-rated (which allow claims) to now exempt status (for which no claims for refunds to GRA will be allowed.
Both Robert Badal and Patrick DeGroot, executives of the Guyana Poultry Producers Association, said yesterday that the combination of these changes would send the price of chicken and other livestock meats up more than 20 percent and make local production uncompetitive.
“As rice, coconut and flour industries depend on the local livestock industry for the sale of their by-products, these industries would also be adversely affected,” the association explained.
The association said it is now calling on the government to restore the zero rate status to all poultry and other livestock products and inputs including feeds, medications, vaccines, meats, among other things.

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