VAT levels playing field -- Persaud argues
By Mark Ramotar
Guyana Chronicle
December 20, 2006
AGRICULTURE Minister Robert Persaud is optimistic that the Value Added Tax (VAT) will be “wholeheartedly embraced” by the business community as the benefits of this new taxation system to be introduced here on January 1, become more apparent.
Addressing members of the business community at a dinner and awards ceremony organised by the Georgetown Chamber of Commerce and Industry (GCCI) at Le Meridien Pegasus Monday, he urged the business community to be receptive to the introduction of VAT.
“The government continues to recognise the importance of the private sector and business community to the Guyanese economy and to be responsive to their concerns (and) this was evident in the steps that have been taken to address the business community’s apprehensions over the introduction of the Value Added Tax from the first of January 2007,” he said.
“VAT is not a punitive tax. VAT is not a protective tax. In fact, it is better to look at VAT less as a tax and more as a system of taxation that would ensure greater fairness, greater transparency and an enlarged tax base,” Mr. Persaud argued.
“When you think of VAT therefore, your focus should extend beyond the 16% rate and examine the overall system and how businesses as a whole will benefit from its introduction,” he posited.
Among the benefits for the commercial sector would be the ability to reclaim input taxes and to thus benefit from lower costs, thereby making their businesses more competitive, he contended.
He also noted that a single tax rate of 16% simplifies the tax collection system and therefore reduces the possibility of corruption as opposed to a system with multiple rates where the possibilities for evasion are greater.
VAT, he said, also levels the playing field for businesses since it encourages persons to declare to the tax authorities their rightful import values.
“Much of the mistrust and apprehension over VAT flows from a lack of understanding of this tax and its implications (and) over the past weeks, a systematic effort has been made to address this issue and I am sure most of you are now better informed and, consequently, enthused by its imminent implementation,” Persaud told the large gathering in the hotel’s Savannah Suites.
“I therefore wish to encourage the business community to be receptive to the introduction of VAT (since) as with any new system, there are expected to be kinks and hiccups, but these I am confident will be quickly ironed out.”
“As the benefits of VAT become apparent to the business community, I am sure it will be wholeheartedly embraced,” Persaud posited.
CWC and CRIME
Persaud also urged the business community to get involved in the preparations for Cricket World Cup (CWC) 2007 which would bring sustained benefits to Guyana’s economy, and by extension, to local businesses.
According to him, CWC will provide many opportunities for businesses since Guyana will gain considerable exposure from the event.
He said the government looks forward to members of the business community being prepared for the many challenges and opportunities the tournament will provide.
He, however, noted that crime is one of the issues that continue to plague progress in Guyana.
“We cannot ignore or pretend that there are no threats (because) crime, I know, is one of the issues that continue to plague our progress,” the minister said, adding that the government continues to spare no effort in providing increased resources to the law enforcement agencies to aid them in combating this scourge.
“A security reform process is in the works and this, when implemented, will ensure that we have a security apparatus that is responsive to crime and accountable for its eradication,” the Agriculture Minister declared.
In the meantime, he said the Guyana Police Force should be supported for the good work it has been doing.
“Guyana is at an important juncture in its history and the signs are all around that we can only get better in the years ahead,” he asserted.
“The development that is taking place in our country, the modernisation of infrastructure, the increased lending that is taking place in the credit sector, the improvements in methods of production and in the provision of services, the mushrooming of more businesses, the significant interest that investors are showing in Guyana, the revival of the traditional sectors of the economy, and the foothold that the new and emerging sectors have already established, are all signs that a transformation is taking place in our country that can only bring improved standards of living in the country.”
He also lauded the Georgetown Chamber of Commerce and Industry for “playing its own role in heightening awareness of the need for all Guyanese to be part of crime fighting.”
“I want to express my appreciation, on behalf of the government, to the Georgetown Chamber of Commerce and especially to its indefatigable President, Mr. Gerry Gouveia for the very involved and outspoken role that the chamber is taking in supporting anti-crime initiatives in the country,” Persaud said.
“I think on this score, Gerry has demonstrated what it means to be a patriot,” he added to applause from the audience.