‘Raking in arrears is what’s saving us’

‘Raking in arrears is what’s saving us’ – Jordan

Jul 01, 2017 News

– VAT collection down $1.8B

Contrary to the belief that the government is raking in money, there has actually been a shortfall in Value-Added Tax (VAT) and Income Tax collection, says the Finance Minister Winston Jordan.

Finance Minister, Winston Jordan

The Minister was at the time fielding questions from members of the Private Sector at a Guyana Manufacturing and Services Association (GMSA) event hosted at the Le Meridian Pegasus Hotel, Kingston Georgetown.
Comments were made about the upcoming 2018 budget. President of the Private Sector Commission (PSC), Eddie Boyer, endorsed the idea of an early budget. He told the gathering that the ‘word around’ is that the budget will be “a very encouraging” one for business and expressed hope that this would be so.
“We are looking forward to something. You got your taxes last year, so this year, give it back,” Boyer said.
Minister Jordan during his response to that, and other comment and concerns raised by the businessmen said, “We are not raking in any money here…Contrary to the belief that we are raking in money, up to May (last), VAT collection was $1.8 billion down relative to 2016 and income tax was down by $1.2 billion relative to last year,”
“What we are raking in at the moment is arrears. Arrears have been up by $4.3 billion. That is what has saved us so far…It’s the collections of arrears for some previously non-compliant sectors – so to speak,” the economist said.
Turning his attention to other comments made over the apparent rising operational cost as a result of the imposed tax measures on water, Jordan begged to differ.
The Minister said that he could not “understand how businessmen could say that the Value Added Tax on water is killing them”.
He posited that businesses were not paying VAT on water at the end of May because the Guyana Water Authority (GWI) is waiting on an expert from the United Kingdom (UK) to make the necessary changes to the utility company’s billing system.
“They (businesses) were not paying the Value Added Tax as of the end of May because GWI has claimed they have to bring somebody from Britain to change the computer system that they have in there to accommodate the Value Added Tax,” he said.
Jordan informed the gathering that the state’s half-year report will be introduced in a few weeks and the private sector will be able to have a look at the performance of the various sectors.