GUYSUCO IS NOT TO BE BLAMED

Mar 11, 2017 Features / Columnists, Peeping Tom

The constant refrain from the government is that the imposition of the VAT was necessary in order to broaden the tax base so to ensure increased tax collections since the government is burdened by high transfer to the Guyana Sugar Corporation and saddled with settlements from the previous administration.
Yet, it was this same government which when it was in opposition that had said there were high levels of tax evasion and tax avoidance. It therefore follows that if the new government closes the windows through which tax evasion and tax avoidance takes place that the extra revenues that it needs can be more than collected.
The government is forgetting, strangely, about the vast amount of taxes which it claims was being evaded and avoided. Instead of going after the tax dodgers and tax avoiders, the government is increasing the range of services on which VAT is applicable. In other words, it is increasing the tax burden on the very people who have been paying taxes all along.
GUYSUCO has become a favorite whipping horse of the government. The transfers which the government is being forced to make to the sugar corporation is being used an excuse as to why VAT is being applied to certain services. GUYSUCO is being presented as a burden on the treasury.
But the transfers are nothing new. Transfers were being made even before the APNU+AFC came to office. Transfers were also being made to the Guyana Power and Light. The reduction in the price of fuel has removed the need for those transfers.
Transfers to the tune of billions are also been made each year to subsidize electricity in Linden. But no one is making the argument that VAT should be applied to electricity tariffs in Linden to promote conservation.
So the transfer to ensure the electricity subsidy in Linden is not being presented as a drain on the treasury but the transfers to GUYSUCO, still a major foreign exchange earner is being decried.
This country owes GUYSUCO. It was the sugar industry which, for years, was deprived of critical funds for its recapitalization. When the PPP/C came to power in 1992, four billion dollars was being extracted, in those hard-guava season days, from the sugar industry to help pay public service wages. The sugar levy deprived the sugar industry of the funds that it needed for recapitalization. This is not a PPP argument. It is argument which was made by one of Guyana’s leading economist who is now close to the present administration.
GUYSUCO provided drainage services to most of the communities on our coastland without ever being compensated for those services. This nation owed GUYSUCO because without those services the agricultural sector would have collapsed.
Thousands of acres of lands were released by the Guyana Sugar Corporation, at below market prices, in order to provide housing for more than fifty thousand Guyanese families.
Government housing is subsidized in Guyana. GUSUCO was never paid market prices for the lands that it has released for housing. These lands are worth tens of billions of dollars on the open market. So please, stop this charade about GUYSUCO being a drain on the resources of the State.
The government should also stop blaming the settlements which they have had to make because of the acts of the previous administration. This is a highly controversial issue. It was the APNU+AFC government which settled with a company which had obtained a judgment from the CCJ.
The fact of the matter is that the opposition has pointed out that certain disclosures were made in that case which would have placed the government in a strong position to not have to make any payout.
The new government however has opted to ignore those disclosures and has made a massive settlement.
The government has not tried to publicly defend its decision. It has also not explained the rationale for settling out of Court with DDL, a company which the GRA had claimed owned them billions of dollars.
The government’s settlement has come back to haunt them since another company has used that precedent to sue the government for the largest sum ever demanded in a court case.
The bottom line is that the government did not need to put VAT on electricity, water, health care and education. It had no need to do this, at least not because of GUYSUCO and not because of the payment of debts as a result of settlements.
The government should stop making excuses and start collecting the billions which it claims is not being collected or is taking the form of avoidance.

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GUYSUCO IS NOT TO BE BLAMED

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