Latest update January 1st, 2025 1:00 AM
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No plan to charge VAT on manufactured exports – Finance Ministry
The Ministry of Finance has assured that Government is not moving to implement Value Added Tax (VAT) on manufactured exports.
Finance Minister, Winston Jordan
“The ministry categorically denies this allegation and makes pellucid that the export of taxable items remains zero-rated,” a statement from the Ministry noted on Friday.
On Thursday, Opposition Leader, Bharrat Jagdeo, accused the Government of moving towards adding VAT to manufacturing products for export.
The Ministry said this is not true. Furthermore, there have been no discussions or contemplations to charge VAT on exports.
According to the Ministry, since the implementation of VAT in 2007, it has not been charged on exports as a relief for exporters, and that has not changed.
“Please be assured that such a proposal with far-reaching consequences would not be introduced without proper consultation and analysis of the impact on the manufacturing sector, and the export and local economy.
The Ministry is therefore appealing to persons to cease reporting unsubstantiated claims and malicious allegations without confirming the facts, and unnecessarily alarming and misleading members of the public to score cheap political points,” the Ministry stated.
As provided in the VAT legislation, there is a distinction between zero-rated supplies and exempt supplies.
According to the ministry, exempt items or supplies are not considered taxable supplies and are therefore not subject to VAT whether locally supplied or exported. On the other hand, taxable supplies are subject to VAT and include items taxed at the rate of zero and items taxed at the standard rate of 14%.
“VAT is not charged on zero rated supplies, but the VAT registrant is entitled to claim or recover input VAT credits since the goods or service is considered a taxable activity.
“On the other hand, an exempt supplier is not required to charge VAT and is also not allowed to reclaim VAT,” the ministry stated.
The Ministry stated that initiatives were taken to exempt or zero rate raw materials and other items used in the manufacturing/export sector to reduce the burden of VAT.
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