GCCI slams Revenue Authority's “dishonest, unfair” modus operandi
Get the facts straight before you attack - GRA
By Melanie Allicock
Kaieteur News
January 9, 2007
President of the Georgetown Chamber of Commerce and Industry (GCCI), Gerry Gouveia, has slammed the Guyana Revenue Authority's (GRA's) method of implementing the Value Added Tax, describing the instituting body as dishonest and unfair to the business community and consumers.
Speaking to media operatives during a tour of city businesses, Gouveia expressed outrage at what he described as the GRA's attempt to ‘demonise the business sector when, according to him, the GRA has failed to implement a system that effectively treats the needs of all the stakeholders in a sensitive manner.
The GCCI head laid the blame for the increase in prices squarely at the feet of the GRA which, he said, expects businessmen to disregard the 30% consumption tax that was paid on goods before December 1.
“ I am very furious and hurt that government is allowing the GRA to demonise the business community by calling them ‘unscrupulous' and making them out to be rogues and thieves because they haven't carried down their prices. But what will they do with their stocks bought before December 1, on which they paid 30% consumption tax plus 20 %? The stock relief provision in place only caters for goods bought as at that date, and even then, the businesses will only be able to claim half of it back. The government is the one that is getting a huge windfall on the goods that were bought prior to last December.”
Describing the business community as the tax collectors for the government's exorbitant taxes, Gouveia stressed that they are just trying to cope with the new tax regime. He is adamant that while there are a few businesses indulging in dishonest practices, the majority of them simply cannot adjust their prices downwards and not suffer losses… due to their existing inventories. He posited that businesses which were able to reduce prices either had a very high mark-up in the first place or are suffering losses.
He added that businesses would have been happy to continue to charge their old prices, but the GRA has made it mandatory for the 16% VAT to be added.
“If we don't charge it, they will lock us up. That's what the consumer does not understand. They walk into stores and blame the sales clerk for the increased prices, but if we don't charge it we will be jailed” Gouveia said.
He stressed that overall, the 16% VAT tax rate is too high, adding that, in previous meetings, the GCCI had expressed concern that it should not be highest in the Caribbean.
However, Commissioner General of the GRA, Kurshid Sattaur, opining that Gouveia has a hidden personal agenda, viewed the attack as an attempt to muzzle him so that he cannot alert consumers to the unfair practices of some businesses.
He maintained that some businesses are not upholding their corporate responsibility by allowing market shares to dictate prices.
The Commissioner General said the sudden claim by businesses of huge stocks has been noted, but he pointed out that these are not supported by the importing and other statistics of the GRA.
“The GRA will implement VAT effectively, regardless of the efforts by these irresponsible members of the business community. We also strongly recommend to these instigators that they educate themselves of these unscrupulous pricing practices employed by these businesses before they attempt to attack the GRA,” Sattaur said.
Acknowledging that inventory has been a major concern of the business community, forcing government to make a policy decision on how it will treat stock, he pointed out that this notwithstanding, the GRA has had to make a policy decision on how it will treat such stock.
He, however, posited that the GRA has been advising businesses to deplete their stock, so that they will not be severely affected when the VAT comes on stream.
Sattaur further stated that, in realisation that the business community could not bear the burden alone, government proceeded to offer debt relief on December stocks.
This, he stressed, is the position that businesses should emulate, since it helps them upkeep their corporate responsibility. He added that in other countries no such relief is provided.
Gouveia is also of the view that, since the system is a new one, a partnership approach should be applied by the GRA in dealing with the private sector, rather than the big stick method which, he said, is being employed.
‘They have to understand that the system is new and that people will make mistakes… and rather than locking people up, work at increasing their educational outreaches. We need to work together to find a solution on how to ease the pressure on the consumer.”
However, Sattaur is convinced that the discrepancies being employed by some businesses are deliberate, and further, that the excuse about being uneducated is a lame one.
He stressed that businesses had adequate time to prepare for the change, since VAT was touted in the National Budget some three years ago.
“Therefore, the GRA will administer and police the system in full respect of the law, and where there are defaulters, we will ensure that the full force of the law takes effect.” Sattaur vowed.
Additionally, he reminded that VAT was slated for implementation in July of 2006, but the private sector lobbied for a postponement to put the necessary systems in place.
According to the GRA boss, tremendous time and resource work was dedicated to the private sector during the pre-implementation process.
In this regard, he said, the sector proposed extensive training for its members, for which the GRA was very supportive and willing to assist. However, they were never invited to facilitate such training.
The GRA, nonetheless, conducted group as well as individual educational and training visits with the business community across the country. This included extensive training sessions with registrants during the month of December.
Sattaur assured that the process is ongoing, and several advisory teams are daily in the field helping businesses comply with the law.
He encouraged consumers during this transitional phase to exercise their right in demanding what they deem to be fair prices.
Overall, the GRA boss hinted that the private sector might have a hidden agenda for trying to prohibit the smooth implementation of the system.
“It's a strategy they are using to attempt to prevent the smooth application. You see, this tax has a high level of audit trail, which can identify miscreants. It will also force the businesses to be more accountable and responsible, because people are now seeing what they are paying, and that's the real problem with them.
After the first week of implementation, despite the hiccups encountered, the Commissioner General expressed satisfaction with the overall process of application of the new tax system.