A test case for the GMSA

Feb 01, 2026 Features / Columnists, Peeping Tom

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(Kaieteur News) – In 2023, when the Guyana Manufacturing and Services Association (GMSA) urged the removal of VAT on a range of locally produced goods, such as data services, chowmein, guava cheese, it was reminded, correctly, that international and regional trade rules do not permit the selective removal of internal taxes on domestic goods while leaving those same taxes in place for like imports.

The rules are old, unromantic, and explicit. They were designed precisely to restrain the kind of well-meaning favouritism that poor countries, anxious to nurture industry (and some would say please the local private sector), are tempted to deploy.

Article III of the General Agreement on Tariffs and Trade (GATT) is the central text. Article III:2 states, in its first sentence:

“The products of the territory of any contracting party imported into the territory of any other contracting party shall not be subject, directly or indirectly, to internal taxes or other internal charges of any kind in excess of those applied, directly or indirectly, to like domestic products.”

The meaning is plain. A country may not tax imports more heavily than domestic goods once those imports have crossed the border. Article III:4 extends the discipline beyond taxation, requiring that:

“The products of the territory of any contracting party imported into the territory of any other contracting party shall be accorded treatment no less favourable than that accorded to like products of national origin in respect of all laws, regulations and requirements affecting their internal sale, offering for sale, purchase, transportation, distribution or use.”

Taken together, these provisions form the doctrine of national treatment. They do not prevent states from encouraging industry. They merely insist that encouragement not take the form of discrimination at the internal tax or regulatory stage.

When confronted with this reality in 2023, the GMSA responded with a clarification. It claimed that it was not seeking discrimination, but parity: an expanded VAT-free basket that would apply equally to domestic and imported goods. If chowmein or data services were VAT-free, then imported chowmein or data services should be VAT-free as well.

This is what the GMSA said back then, “We are in no way implying that the government should impose VAT on identical imported goods. This would not violate international or regional trade laws, as it would not give domestic goods and unfair advantage over foreign goods once the product has already entered the domestic market. It therefore means that the foreign producers (sic) would be able to import their goods (identical items) into Guyana without VAT. Thus we are accorded the same treatment pursuant to Articles 3(2) and 3(4), provided that our proposal is approved by government.”

Fast forward to Budget 2026. The government has announced the removal of VAT on locally manufactured furniture and jewelry. There was no accompanying statement that identical imported furniture and jewelry would receive the same treatment. On its face, the measure confers a fiscal advantage on domestic producers alone. It is precisely the sort of internal tax differentiation that Article III:2 was written to prohibit.

More striking still is the response of the GMSA. The association has welcomed the measure, despite its earlier insistence that it understood the constraints of international and regional law. Silence, in this instance, carries meaning. It suggests either a lapse of memory or a willingness to accept illegality when it appears to favour one’s immediate constituency.

The problem does not end with GATT. Guyana is also bound by the Revised Treaty of Chaguaramas, which governs the CARICOM Single Market and Economy. Article 78 of that Treaty provides that goods of Community origin “shall be accorded Community treatment,” and that Member States shall not apply discriminatory internal taxes or charges to such goods. The Treaty, to which Guyana is bound states:

“In order to achieve the objectives of its Trade Policy, the Community shall: … prohibit the imposition by the Member States of new restrictions on imports and exports of products of Community origin.”

The logic mirrors GATT: once goods are lawfully within the market, they must compete on equal terms.

If Guyana removes VAT on locally produced furniture and jewelry while retaining it on like imports from CARICOM partners, it risks breaching not only multilateral obligations but regional ones—obligations undertaken in the name of integration, cooperation, and collective economic strength.

This is where the GMSA’s responsibility lies. An organisation that claims literacy in trade rules cannot applaud discrimination when it wears a friendly face. Consistency is not a luxury in trade policy; it is its foundation. If the association truly believes, as it said in 2023, that VAT exemptions should apply equally to domestic and imported goods, then it must now say so—publicly and without embarrassment.

To demand equal treatment for imported furniture and jewelry would not weaken local industry. It would strengthen the credibility of policy. It would signal that Guyana’s development strategy is not built on shortcuts that invite retaliation or dispute, but on rules understood and respected.

(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper.)

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• GMSA, Peeping Tom, poor countries, test case, VAT

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