Guyanese businesses question tax and duty-free concessions for Chinese supermarkets and hardware stores

Jun 23, 2024 News

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…says rapid expansion of Chinese businesses may be a strategy to undermine Guyanese

Kaieteur News – The Guyanese Businesses Owners Association (GBOA), comprising 65 entities and individuals have requested a meeting with President Irfaan Ali to address concerns regarding the proliferation of non-naturalized Chinese owned businesses, predominantly supermarkets and hardware stores, throughout communities in the country.

In a letter to the Head of State and Vice President Bharrat Jagdeo among other high level government officials, the group explained that these establishments often emerge in close proximity to their businesses, and sometimes multiple similar Chinese stores are established on the same street.

The Guyanese business owners were keen to note that while they recognize and embrace healthy competition for the benefit of consumers, their primary concern pertains to the perceived lack of adherence by Chinese businesses to the same laws and regulations governing Guyanese enterprises.

They argued, “Many of these Chinese stores fail to provide tax invoices automatically with purchases, and when requested, such invoices are begrudgingly provided. Additionally, they neglect to display TIN (Taxpayer Identification Number) on invoices, omit charging VAT (Value Added Tax) on applicable items, and abstain from listing product descriptions on invoices.”

GBOA in its April 22, 2024 missive also noted that there have been instances where consumers unknowingly purchased expired food items from these establishments, only to find no recourse for product support.

These flagrant breaches, according to the Business Association, raise questions about accountability and concerns about the oversight by relevant authorities. To this end, the businesses said they cannot help but speculate whether these non-naturalized Chinese businesses receive preferential treatment or special concessions.

According to the group, “The rapid expansion of these Chinese stores, fueled by their ability to invest and develop at an accelerated pace compared to local businesses, coupled with their non-compliance with established norms and their capacity to offer products at significantly lower prices, poses an existential threat to the Guyanese business community.”

To this end, the Business Association requested the attention of the President to address their concerns. The group was keen to note that the rapid proliferation of Chinese businesses suggests significant capital investments as they questioned whether these businesses are complying with Guyana’s Anti-Money Laundering laws overseen by the Bank of Guyana regarding the influx of substantial funds.

The Business Association was also curious of the factors driving the sudden surge of Chinese businesses across Guyana, prompting questions on why the regulators allow multiple similar Chinese stores to operate on the same street or within close proximity.

The businesses pointed out, “The rapid expansion of Chinese businesses may not reflect normal market competition but rather a strategy to undermine Guyanese businesses by diminishing their market share, potentially impacting those with financial obligations to lending institutions such as loans and mortgages.”

In light of the growing number of Chinese owned supermarkets and hardware stores, the local businesses questioned whether they were being subjected to the same taxes and import duties as local businesses, or whether they receive preferential treatment such as duty-free concessions for their imports.

The group in their letter to President Ali also noted that many Chinese businesses hire a considerable number of Chinese. Questions were therefore raised about the percentage of Guyanese that are required to be hired by these businesses, if such regulations are in place.

Furthermore, the GBOA requested clarity on the licenses granted to these businesses in accordance with Guyana’s legal framework, including adherence to building codes and permits, taxation and VAT regulations, labor laws, National Insurance Scheme (NIS), and Pay As You Earn (PAYE) requirements.

They were keen to note that some consumables sold by these stores are not labeled in English or translated to English, as mandated by the Food and Drugs Department, while some of these businesses open beyond the lawful business hours.

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• Chinese, CONCERNS, President, supermarkets, taxes

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