Chambers of Commerce jittery about VAT implementation
Kaieteur News
November 16, 2006
Several Chambers of Commerce in Guyana are still unclear about a number of issues relating to the implementation of Value Added Tax (VAT) and Excise Tax, which will replace several other taxes when implemented on January 1, 2007.
Some of those concerns are spread over on the treatment of stock on hand come January 1 and the perception that the implementation of the new tax regime will bring with it increased cost of living and more burden on ordinary consumers.
Despite the efforts of the Guyana Revenue Authority (GRA), there are concerns that enough information has not been reaching some of the far flung areas in the country and as such there is the fear that there will be some confusion and trepidation once VAT is introduced.
President of the Berbice Chamber of Commerce and Industry (BCCI), Norman Semple told Kaieteur News that from the various interpretations of the new tax, the final figure of 16 per cent should transfer to consumers and result in the lowering of prices.
He however called for the implementation date to be postponed, which will allow authorities to effectively prepare to implement VAT.
“Right now it seems as if everything is being rushed and what will happen is that this new tax will be on us and many business operators will not know what to do. Already consumers fear that VAT will bring increased cost of living, but there is not enough information out there to alleviate those fears,” Semple stated.
He posited that the GRA should take steps to ensure that unscrupulous businesses do not capitalise on the fears that exist to hike prices and blame those increases on VAT.
“It should be stressed that if businesses do this, it is illegal,” Semple alluded.
Further up Berbice, the Central Corentyne Chamber of Commerce and Industry (CCCCI) also believes that the GRA should do more to educate and sensitise the general public.
President of the CCCCI, Adrian Anamayah expressed concern that Guyana lacks the systems to implement and monitor the cost of living especially at this critical time with the implementation of VAT.
“Based on experts, the cost of living will go up, but how will we be able to document this,” Anamayah questioned.
He noted that this is an area in which the Government should rethink its strategy.
Anamayah posited that the GRA needs to police the system effectively to avoid duplication of certificates, which will be issued certifying a VAT registrant.
He added that the GRA will also need to monitor some businesses that may seek to capitalise on VAT by placing high mark-up prices.
The CCCCI President alluded that every time a product changes hands, a 16 per cent VAT is added, and by the time it reaches the consumers a 30 per cent or higher tax may be included in the mark-up price.
“We may need to have some price control mechanism in place to address some of these concerns,” Anamayah stated.
He noted that the implementation of VAT could not be postponed further since it has been deferred on many occasions and the Government may be under pressure to implement it on this occasion.
“Postponing the date again may not be an option, but the Government could take steps to safeguard the implementation of VAT in accordance with its stated benefits,” Anamayah said.
The Georgetown Chamber of Commerce and Industry (GCCI) also believes that postponement of VAT may not be an option at this stage.
GCCI point person on VAT, Edward Boyer expressed the view that the time to fight against VAT has gone and since it was made law by the National Assembly, the focus should be to ensure that it is implemented effectively.
He noted that the GCCI is concerned about what will happen to the year end stock come January 1, since those stocks would have been subjected to other taxes including a 30 per cent Consumption Tax (C/Tax).
He added that the GCCI is also concerned about the billing system to be used with the implementation of VAT since the GRA will have to authorise all bills to be in conformity with its standards.
“Given the time remaining, we are concerned about the bills that will have to be authorised by the GRA; we are not so sure about the time,” Boyer stated.
The Essequibo Chamber of Commerce and Industry (ECCI) is also concerned about stock on hand and believes that the information to appease this concern has not been forthcoming.
President of the ECCI Samuel Arjoon noted that the GRA has also not provided information on those items that will be zero rated and what will happen to those stock on hand that will now be listed as zero rated.
Arjoon stated that with six weeks to go before the implementation of VAT, the GRA will have to work overtime to ensure that it reaches its implementation deadline.
He also questioned whether GRA has the requisite staff not only to police the VAT system but to ensure that all systems are in place before and after January 1, 2007.
The Linden Camber of Commerce and Industry (LCCI) and the Rupununi Chamber of Commerce and Industry (RCCI) are said to be discussing the impact and implementation of VAT. (Gordon French)