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The blame game
Guyana has been hit with another judgment by the Caribbean Court of Justice, in relation to the imposition of the environmental tax which was found to have been a tax imposed on regionally produced goods, contrary to the revised Treaty of Chaguaramas.
The blame game has begun with the PPP/C accusing the APNU and the AFC of being responsible for this judgment because of the actions of the two parties when they were in opposition.
The PPP/C government was taken to Court by a Surinamese company over the application of the environmental tax which was challenged as being inconsistent with the rules governing trade in regional goods.
The PPP/C sought to attenuate a large judgment by the CCJ by moving to amend its discriminatory environmental tax. The PPP/C had introduced the tax eons ago on imports alone. It did not apply it to local production which meant, in the eyes of the CCJ, that it represented an import tax on goods, including regional goods. The Revised Treaty of Chaguaramas does not permit a tax on regional goods.
The PPP/C did not have a majority in the National Assembly when it moved its amendment to put itself in order and ensure that the environmental tax was not discriminatory. Had that amendment gone through, Guyana may have been spared being heavily penalized for its discriminatory environmental tax.
APNU and the AFC voted down the amendment on the grounds that the PPP/C needed to consult with manufacturers in Guyana. The amendment would have seen the tax being applied to local production as well as to imported goods.
The amendment was not passed and Guyana could not advise the CCJ that it has put its house in order. As a result, the CCJ inflicted a heavy judgment against Guyana.
Another Caribbean company has also approached the CCJ and has won a judgment. The government of Guyana has to repay the company all the environmental tax it had collected over the past five years.
The PPP/C has used this recent decision to remind the APNU+AFC coalition of the use of its one seat majority when those parties were in opposition to vote down the amendment which would have regularized the situation.
APNU +AFC since coming to power, regularized the environmental tax but it is not clear whether they did this in consultation with the local manufacturers, given that when the tax was imposed the local manufacturing class called for it to be removed.
A new argument has since surfaced. It is said that the PPP/C ignored 12 previous warnings from COTED on its discriminatory environmental tax.
The PPP/C was always aware that the environmental tax was discriminatory. COTED warns Caribbean countries all the time. It has warned Caribbean countries about them importing rice without applying the CET. They still do it. There are warnings now about the protectionist measures being adopted by Trinidad and Tobago. It discussed Guyana’s waiver of the common external tariff on cement, a matter which ended up also in front of the CCJ but from which Guyana was spared a penalty.
Guyana during the case about the environmental tax never contended that the tax was legal. Guyana therefore knew at all times and accepted that the tax was illegal just as how some regional countries are accepting that some of their restrictions on transshipment are illegal and are promising COTED to do things about it but are not.
The fact of the matter that the CCJ did not impose penalties in Guyana in the cement case because it saw that Guyana was acting in good faith by moving to correct its wrong doing, however belated.
Guyana tried to do that in the environmental tax case but came up against the APNU+AFC stone wall. The issues of Guyana being warned 12 time by COTED does not change that reality.
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