Sugar levy $$ to help make industry more competitive
By Chamanlall Naipaul
Guyana Chronicle
July 30, 2003
The Sugar Levy Repeal Bill, which was passed in the National Assembly last Thursday effectively brings to an end the Sugar Levy Act that was enacted in 1974.
Minister of Finance Saisenarine Kowlessar, who piloted the Bill, noted that when the sugar levy was introduced 55%-85% was creamed from every dollar of sugar sold, resulting in the loss of wages to sugar workers and affected critical inputs into the industry, because the levy was taken from gross income and not from profits.
The then government in an attempt to justify the rationale for the introduction of the levy contended that it wanted to share the income from the sugar industry nationally, the minister recalled.
Setting up shop on the proposed vendors’ site
CONTROVERSY surrounds the commissioning of the Toolsie Persaud Limited (TPL) Water Street site that has been proposed for pavement vendors. Yet, over the last two days, vendors have been taking up spots in their eagerness to get their little businesses going again. Here, the owners of this outlay are busy setting up their shop yesterday. (Picture by Cullen Bess Nelson)
However, the levy contributed to the decline of the sugar industry threatening its collapse, Kowlessar contended, and eventually became a factor in the nationalization process whereby the owners of the industry Booker-Tate did not object to nationalization because the levy made it unprofitable.
He further pointed out that in the context of the phasing out of the preferential markets for sugar by 2006 the removal of the levy would allow the industry to recapitalize and restructure to become competitive to meet the challenges of globalization and liberalization of trade.
Alluding to the significant contribution of the sugar industry to the national economy the minister disclosed that it is responsible for 25% of export earnings and accounts for 16% of Gross Domestic Product, while between 1991 and 2002 it contributed $5B in various taxes.
He further stated that the industry provides direct employment for over 18,000 persons, apart from the indirect jobs it creates.
Touching on the modernization plan for the industry to make it more competitive and efficient in the face of the phasing out of the preferential markets by 2006, Kowlessar said efforts are geared towards reducing the current cost of production from US19cents per pound to US11cents.
In addition, the new state of the art factory to be sited at Skeldon will be capable of producing 110,000 tonnes of sugar per annum thereby increasing national production to 420,000 tonnes annually, Kowlessar disclosed.
The minister emphasized that the industry has to be in a state of readiness to meet the emerging challenges while every form of support has to be provided to ensure its long-term viability.
Chief Whip of the People's National Congress/Reform (PNC/R) Lance Carberry said the levy was introduced as a mechanism to ensure that apart from the sugar workers the rest of the nation benefits from the income of the industry.
However, he accused the government of asking the National Assembly to merely "rubber stamp" the Bill as it had stopped enforcing the levy for several years.
People's Progressive Party/Civic (PPP/C) and President of the Guyana Agricultural and General Workers Union (GAWU), Komal Chand, argued that the levy impinged upon the industry's performance, resulting in it almost collapsing.
He pointed out that in 1988, 1989 and 1990 Guyana was forced to import sugar for the first time since it became a sugar producing country.
He further charged that the levy was used to discriminate against sugar workers who were perceived to be supporters of the PPP.
Leader of Rise, Organize and Rebuild (ROAR), Ravi Dev, in supporting the Bill contended that the levy was a punitive device against the sugar workers because after two years of its implementation the industry plummeted.
