GRA boss calls for boycott of dishonest businesses
Kaieteur News
January 6, 2007
Commissioner General of the Guyana Revenue Authority, Mr. Kurshid Sattaur, has called on consumers to boycott unscrupulous businesses which seek to exploit customers through the recently implemented Value Added Tax (VAT) system.
Sattaur also advocates that persons refuse to buy from businesses unless they can produce a VAT registration certificate.
Speaking with Kaieteur News yesterday, the Commissioner General informed that continuous outreach activities, being conducted by the GRA in collaboration with the Ministry of Trade, throughout the country have revealed that the smaller retailers, wholesalers, and distributors are mostly involved in price gouging activities.
These actions, the Commissioner General posited, are not being done out of ignorance, but are deliberate.
“I have no reservation in calling these businesses unscrupulous. Many of them that are just slapping on the 16% on prices are not registered and don't even file their returns. The consumers have to know their rights and enforce them” the Commissioner General said.
He also called on consumers to request that the larger businesses provide price advisories.
“I know for a fact that the smaller businesses, retailers, and vendors are not adhering to the price advisories of the larger entities. They are the major ones that are indulging in the price gouging”
The example he cited was where the Demerara Tobacco Company advised that a carton of Bristol cigarettes be sold for $6,200. However, one packet is being sold to consumers for $250.
These outreach activities, the Commissioner General said, while they still have a long way to go, have yielded some positive results.
Sattaur said he is heartened by the decision of a growing number of businesses to adjust the Consumption Tax out of their pre-VAT prices before applying the VAT rate, in order to either maintain or reduce final prices.
“Wisdom has prevailed, and a number of businesses have improved their systems and are in greater compliance with the VAT law. Quite a few have adjusted their prices downwards. Entities such as Courts, Nigel's Supermarket, and Gafson's are now in support of the VAT system and have adjusted their prices accordingly,” Sattaur revealed.
Meanwhile, Muneshwer's Limited and NP Home Department Store were, yesterday, served with summonses for violation of the law relating to invoicing requirement. Several other businesses will also be prosecuted shortly for similar offences, according to the GRA.
A release from the GRA stated that this action was taken as a result of stepped up policing mechanisms, and enforcement of the law relating to the VAT.
It is also a result of the GRA supplementing its audit procedures with additional investigative methods, to ensure that businesses remit all the VAT due and unearth any violations of the VAT law.
“ The law requires that VAT returns be filed within fifteen working days following the preceding tax period (one calendar month) and the correct amount of tax paid to the VAT department” the Commissioner General reminded.
The Guyana Revenue Authority announced, earlier in the week, that it was prosecuting three business places for breaches of the law as it relates to the Value Added Tax.
Sattaur reported that these cases are still being processed, along with others.
Additionally, several ports of entry were monitored. Sattaur reported that while initially minor hiccups were discovered at Customs, these were immediately rectified, and it was business as usual.
He implored businesses to play a key role in contributing to a seamless transition to the VAT regime.
“Businesses are reminded that a key factor which will aid in this transition is a steady rate of consumption of commodities in the country.”
He pointed out that if consumers shop less as a result of higher prices, businesses stand to suffer revenue losses.
In addition, since businesses will invest less to supply products, eventually they will bear the VAT, even after applying their current percentage mark up, their prices should be maintained,” Sattaur stated.
However, he said the GRA continues to note a number of concerns with business entities.
These include businesses charging VAT but not displaying certificates, while others are not complying with invoicing requirements.
Other businesses, he noted, are not mounting adequate signs to indicate whether their prices are VAT inclusive or non-inclusive.
The major issue, though, still is that some businesses are inordinately increasing prices of their produce, implying a price increase effect of the tax.
The GRA stressed that the VAT law stipulates penalties for violation requirements relating to these incidences, and no effort will be spared in enforcing the law.
“Consumers are reminded that registered businesses which display an authentic VAT Certificate are obligated to charge the appropriate VAT on the commodities they supply. Businesses are also urged to follow closely the legal requirement in preparation of their invoices,” the release states.
Meanwhile, the GRA continues to solicit businesses with turnover of $10M to register, as that process continues.
According to the Commissioner General, reports have been received that persons with the estimated turnover have not yet registered and are evading the VAT monitoring teams, in some instances halting business activities.