GRA accuses private sector of trying to derail VAT
By Shawnel Cudjoe
Guyana Chronicle
January 9, 2007
THE Guyana Revenue Authority (GRA) yesterday accused some sections of the private sector of trying to thwart the smooth implementation of the Value Added Tax (VAT), following a charge by Georgetown’s leading private sector body that the Authority was being dishonest about the implementation of the tax.
“Despite attempts by some sections of the private sector to muzzle me in my efforts to smoothly implement VAT, I maintain that some businesses are not upholding their corporate responsibility by allowing market forces to dictate prices,” Commissioner General of GRA Mr Khurshid Sattaur said at a press conference at the Albert Street VAT office yesterday afternoon.
Earlier in the day President of the Georgetown Chamber of Commerce Mr Gerry Gouveia had accused the GRA of being “dishonest and making the business community look like criminals” when he visited several Georgetown businesses.
Gouveia pointed out that because businesses already paid Government the consumption tax on goods for last year, with the added 16 per cent VAT, they are receiving a “huge windfall” which the public does not know about.
He pointed out that most businesses imported goods before December, 2006, and these were not eligible for the Government’s 16 per cent relief.
He added that the GRA and the Government are making an enemy out of the private sector and this should not be so. “We are furious and we are hurt that Government is allowing the GRA to treat the business community like they are mobsters and monsters,” he said.
According to Gouveia, one of the measures that the Government could consider is decreasing the VAT rate to eight percent for the next three to four months, to show they are taking some responsibility.
“It is still unfair to the business community, and the Government does not want to take any responsibility for this.”
He said that the GRA needs to be considerate and the Private Sector is willing to sit down with all the relevant stakeholders to help bring relief to consumers, because all are concerned about their welfare and the development of Guyana. “We are all partners in the development of Guyana,” Gouveia firmly stated.
He expressed disappointment that the GRA can label them scoundrels but added that the GCCI is willing to work with the Authority to relieve the burden of the consumers.
“This is not a time for us to be fighting and demonizing each other,” he stated. He added that the GRA’s behaviour “is testing the friendship and partnership that we’ve built over the past three years,” he pointed out.
He urged businesses to try and hold their prices and be sensitive to the consumers. Commenting on businesses which are reportedly raising the prices for goods and then adding VAT, Gouveia said that it can be described as insensitive, but not unscrupulous, since Government cannot dictate the prices the businesses place on their products.
Shipping Manager of Muneshwer’s Limited Mr Robin Muneshwer said the GRA’s decision to summons the establishment came as a shock.
He said that last week, a three member team from the GRA visited the business and during a meeting, pointed out some of its deficiencies and the business was given until yesterday to have them corrected.
However, he said that on Friday last they were summoned to attend court on a charge of recklessly not providing tax invoices. “We are very sad that the GRA is taking this high handed attitude,” Muneshwar said.
He condemned the “disinformation campaign” of the GRA which he claimed is giving the public the impression that the consumption tax on all goods is 30 per cent.
According to Muneshwar, the public needs to understand that if the consumption tax on some items is 10 per cent with the introduction of VAT, prices will increase.
“Thirty per cent has become a mantra. The public is coming to us and saying why your prices have not gone down,” he stated.
He added that the business have begun dropping prices for some goods in an effort to take pressure off the consumers. “We are going to absorb some of the costs and in some cases, we will actually lose money,” said.
He urged that a better information campaign be put in place.
Executive Director of the Laparkan Group of Companies Mr Vibert Parvatan said that Fogarty’s has dropped some of its prices to ensure they maintain market share.
“We are looking at a smooth implementation, we are compelled not because of generosity of spirit, we are compelled to absorb some of the cost to hold our market share,” he stated.
He said that all stakeholders should work together to ensure that the tax is smoothly implemented.
Mr Khurshid Sattuar at the press conference yesterday afternoon, said that some businesses are trying to derail the process and they are using stock on hand as an excuse. “We are utterly amazed by this amount of stock that suddenly materialized,” Sattaur stated.
He said that it is hoped that the stock is reflected in their tax returns when they are filed. “We rather suspect that it is a strategy they are using to avoid having the VAT properly implemented.”
He said that the GRA had been advising businesses to deplete their stock so that they will not be severely affected when VAT comes on stream; but Government realised that they could not bear the burden alone and offered relief on the December stock.
“This we believe the business community should emulate, since it helps them to upkeep their corporate responsibility. In some countries there is no relief whatsoever,” Sattaur told members of the media.
He accused the business community of “price gouging” and said that consumers should be reassured that, once implemented and allowed to operate under a fair system, the VAT is advantageous.
He said that the business community is attempting to “muzzle” him so that he would not speak out and educate the consumers on the issues. He urged that consumers to know their rights and demand better prices, and not be fleeced by unscrupulous businesses.
“The GRA would like to encourage consumers, during this transitional phase, to exercise their right in demanding what they deem to be fair prices.”
He said that GRA will implement VAT effectively, regardless of the efforts of the irresponsible members of the business community and urged that they be educated on pricing practices employed by these businesses.
“We therefore strongly recommend to these instigators that they educate themselves about the unscrupulous pricing practices employed by these businesses before they attempt to attack the GRA,” he stated.
He said that businesses should not use the excuse that they were uneducated about VAT, since it was touted in the National Budgets some three years ago and was slated for implementation in July 2006, but was postponed at the private sector’s request.
According to Sattaur extensive training was done with VAT registrants and the process is still ongoing; the GRA feels that businesses had adequate time to prepare for the change.