Linden businesses troubled as VAT implementation date nears
Kaieteur News
November 28, 2006
The business community in Linden has expressed deep concerns about a number of issues relating to the January 1, 2007 deadline for the implementation of Value Added Tax (VAT) and Excise Tax.
The business community is citing the lack of information from the Guyana Revenue Authority (GRA) hence the inability to quell fears about the general feeling of price hikes and the treatment of stock on-hand as of December 31, next. This is being highlighted as a major hurdle.
President of the Linden Chambers of Commerce and Industry (LCCI), Basil Jaipaul, told Kaieteur News that the GRA has not being doing enough in Linden to sensitise the business community to the implementation of VAT.
He pointed to a recent workshop held in Linden where GRA officers could hardly respond to queries posed by the business community. The meeting eventually ended in chaos.
Jaipaul added that repeatedly questions were asked about what would happen to stock on hand as of January 1.
He posited that the general feeling is that the prices of those goods will rise as an additional 16 per cent VAT will be added to the 30 per cent Consumption Tax (C/TAX) which would have already been paid.
Jaipaul urged that the GRA change its public awareness campaign since the few television advertisements are not effective.
“In Linden those advertisements are not enough; the GRA needs to reach out to the business community directly, but not much has been happening in Linden and this has caused some business operators to become complacent,” Jaipaul alluded.
Despite the best 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, he added.
The Berbice Chamber of Commerce and Industry (BCCI), The Georgetown Chamber of Commerce and Industry (GCCI), the Essequibo Chamber of Commerce and Industry (ECCI) and the Central Corentyne Chamber of Commerce (CCCI) have all expressed some reservations about VAT implementation, particularly the stock-on-hand and the list of zero-rated items. Sources have told Kaieteur News that the government is currently examining ways to treat with stock on hand and basic food items.
Cabinet Secretary, Dr Roger Luncheon recently announced that the government may return to Parliament seeking further amendments to the VAT and Excise Tax Act of 2005.
This decision is a step away from previous announcements made by the administration that changes were not needed before the implementation of VAT.
All goods and services will be subject to 16 per cent VAT except those that are zero-rated or exempt.
VAT will not be paid on utility services, money transfer, foreign exchange trading, several health related services, rent for residential purposes and leasing of land for residential purposes.
Any business that is not registered for VAT, businesses that have gross sales below $10M and non-registered exporters will be excluded from charging VAT.