Government waives freight taxes on imports

Aug 11, 2021 News

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Kaieteur News – On the 9th of August, the Office of the President issued a press release stating that President Ali had instructed that freight charges were to be reduced to pre pandemic levels (March 1, 2020) in the calculation of Customs Duties, Excise Taxes and Input Vat on goods imported. The press release stated that the government had been monitoring the socio-economic impact of the COVID-19 pandemic on household income, the private sector and the economy as a whole and had noted the marked price increase in shipping costs from various countries. It was noticed that in some cases, the price for a 20-foot container moved from US $2,500 to US $15,000 while the price for a 40-foot container moved from US $3,500 to over US $20,000. The release noted that these price increases due to increased shipping and freight fees as a result of the global COVID-19 pandemic were being passed on to the consumers. Due to having observed that Guyanese were being forced to pay these increased prices, the President had decided to announce the tax relief. Consequently, the relief is to be applied to any invoices from August 1, 2021 and is set to run until January 31, 2022.

This announcement comes on the heels of citizens expressing their frustration about the price increases. Back in February, a number of citizens had voiced their concerns about a price increase for commodities and goods. Several consumers had complained of an almost 100 percent increase in the cost of most vegetables at both markets and supermarkets. The President of the Georgetown Chamber of Commerce and Industry (GCCI) Timothy Tucker had earlier in the year attributed the hike in food prices to the increase in global shipping costs as a result of the COVID-19 pandemic. Additionally, stakeholders in the construction sector have also complained about an increase in the cost of steel, which has skyrocketed due to increasing product and freight costs as a result of the COVID-19 pandemic. In May, Vice-President Dr. Bharrat Jagdeo had said that the Government was paying attention to the increase in the cost of living, which was due to external factors.
Since the announcement, many entities and organisations that form part of the business community have since issued statements praising the measures.
The Central Corentyne Chamber of Commerce in a press release had said that it was extremely pleased to note the President and Government of Guyana had once again intervened to bring relief to the people of Guyana through the measure of using pre-COVID shipping rates for the computation of duties and taxes and that it was calling on businesses to please ensure that the savings accrued from this measure is immediately passed on to consumers.
The Guyana Manufacturing and Services Association Limited in its press release commended the Government of Guyana and President Ali, on “the timely decision to reduce the adverse impact of increased freight costs on Customs Duties, Excise Taxes and Input VAT calculations, by reverting to pre-pandemic estimates.” It further states that it was confident that the Manufacturing Sector in particular will be regenerated to a more competitive position for regional and international trade, with an exponential increase in exports. Additionally, it stated that, “further to the Government’s assurance of monitoring the cost of goods and services, the GMSA intends to work with its members to ensure that all cost-saving measures are transferred to the relevant sectors under its purview and by extension, consumers.”
The Federation of Independent Trade Unions of Guyana’s press release mirrors sentiments similar to the others, and further states that they “expect within the coming days and weeks to see some of the mounting prices beginning their decline and workers wages/salaries going a bit further.” Additionally, the FITUG notes that it “also looks in the coming weeks to a continued monitoring of the situation to ensure that workers and all Guyanese are benefitting from the Government’s initiatives. The FITUG believes too that some examination of the fuel prices should be examined to further reduce the cost-of-living. We urge too that other, more direct measures be considered in an effort to offering further reliefs to our beleaguered working people and their families.”
In its press release, the Georgetown Chamber of Commerce and Industry (GCCI) noted that it has been keenly observing and analysing the prevailing market conditions, which have been severely affected by the global pandemic. The organisation further stated that it observed shipping prices increasing by six (6), and in some cases, ten (10) times the pre-pandemic level. In this regard, the GCCI requested to the Government of Guyana that consideration be given to apply duties and charges to the ‘Free-on-Board’ (FOB) value, which assesses the value of the cost of the goods only as opposed to the ‘Cost, Insurance, & Freight’ (CIF) value. It said that the recent move by the Government of Guyana to ease the burden of increased shipping cost by restoring shipping charges to the pre-pandemic level of charges is expected to ease the burden on both the private sector and consumers. The GCCI expressed its gratitude to the Government of Guyana and strongly urged importers to not behave in “an unscrupulous and unpatriotic manner by profiteering off of a measure designed to ease the burden on the Guyanese people.”

 

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