'Worrying', 'unacceptable' reports - As VAT comes on stream
By Neil Marks
Guyana Chronicle
January 3, 2007
FINANCE Minister, Dr. Ashni Singh yesterday admitted to “worrying, unacceptable” reports of consumers paying higher prices at retail outlets and threatened to blacklist cheating businesses as the government began administering Value Added Tax (VAT).
It was clear that a significant number of businesses did not understand how to administer VAT and many consumers unclear on the process and what items they could be charged VAT for were forced to buy or go home empty handed.
At the close of the day yesterday, the Finance Minister said he did not believe that the outlets which marked up their prices higher were engaging in unscrupulous practices and said officers from the Guyana Revenue Authority (GRA) and the Consumer Affairs division of the Ministry of Tourism, Industry and Commerce would be working with them.
However, he said, he would not refuse to name those businesses bent on racking up their prices.
At a news conference, Singh said the excuse of businesses that they had “old stocks” does not hold up, since they could discount the previous taxes from their items and when they charge VAT, the price of the items would remain the same or be lower.
In cases where businesses discount the old taxes from their stocks and apply VAT, they would be given back the tax that they were charged last year before VAT, and as a result, Singh said, there should be no such excuse of “old stocks”.
The minister also asked consumers to be vigilant and not to buy at first option, but rather to look for places with lower prices.
President of the Georgetown Chamber of Commerce and Industry, Capt. Gerry Gouveia said VAT is “good” for Guyana, noting that other countries have implemented it. He called for patience on the part of businesses and consumers to make the new system work.
Speaking with the Guyana Chronicle, Mr. Khurshid Sattaur, Commissioner General of the GRA, commended the Beepat’s store on Regent Street, Georgetown which carried whole page advertisements in the newspapers explaining that with the implementation of VAT, its prices are lower, pointing out to consumers how this is possible.
He said other business should follow this example and see it as a competition against those who fail to apply the system and instead raise their prices.
With the removal of six taxes, including the 30 per cent Consumption Tax, the application of 16 per cent VAT means imports attract lower landing costs and thus the prices should be reduced on shelves.
However, some businesses yesterday were charging the VAT on the old prices, while Singh said there were unconfirmed reports that some businesses were telling customers that if they buy without expecting a bill, they would not have to pay VAT.
It was also found that businesses were not displaying their certificate of registration, but they were still charging VAT. Conversely, some businesses which are registered were not charging the VAT.
In addition, businesses were charging VAT, but this was not reflected on the bill that they give to consumers.
Some smaller businesses were having difficulties issuing bills to their customers who bought numerous small items.
Sattaur said businesses will be monitored to ensure that consumers benefit from stock relief that businesses will enjoy. He said the GRA will continue its investigations and will publish the names of defaulters.
Sattaur also said the GRA will also move to publish the suggested retail price for certain products and could also publish the names of businesses offering the items at those prices so consumers can know where to shop.
As at December 29, the GRA said more than 1,600 businesses were registered with the VAT Department and are authorised to charge, collect and remit VAT.