VAT claims 'job casualties' in New Amsterdam
By Shabna Ullah
Stabroek News
January 13, 2007
A New Amsterdam store owner has let three of his staff go as a result of reduced sales in the aftermath of the implementation of the Value Added Tax (VAT).
The businessman said he regretted having to lay off the workers, but was finding it hard to cover his other expenses given the more than 40% reduction in his daily sales.
He said VAT is "a total confusion and businesses are deeply affected."
According to him if it continues in that manner a lot more persons from other businesses would also lose their jobs. "I don't think Guyana is ready for VAT. The government said cost of living would go down but I am not seeing that," he said.
Consumers are complaining that they have not received an increase in their salaries and they are finding it difficult to pay extra for items.
"Wages and pensioners' pay should also go up because if we want an item for $400 and we have to pay 16% VAT it does not come from the government's pocket but the poor class of people," consumer Esther Jonas said. "If you do not have the money you cannot purchase an item. I try to go into a store that does not charge VAT just so that I can balance my budget."
Another New Amsterdam businessman said that on the day VAT was implemented he paid $522 for a set of Styrofoam cups for his homemade ice-cream business instead of the usual $450.
He said he was sure the owner had the cups before January 1 and given that they were old stock, he should not have charged VAT on them. The ice-cream seller said his business was small and should he increase the price for his product no one would buy it.
Another consumer said she checked the prices for items and found only one supermarket giving "redress." She said the owner "dropped the prices on several products and also itemized what is VAT inclusive, so the prices have not gone up."
Stabroek News learnt that the owner of the supermarket has decided to do that since he did not want to lose sales or have the shelf life of his products expire.
The owner of a boutique in the town said the Guyana Revenue Authority (GRA) was giving persons the impression that if they paid more for items it was because businesspersons were being unscrupulous.
"One customer told me that the government is giving back businesses 30% and we have to add 16% which would make the prices lower. Businesses are not offered any relief on old stock and we are losing," he said.
According to him a man who bought a printer at another New Amsterdam store walked out of the store and said the owner had just robbed him. He said the man did not understand that the printer was subject to VAT.
He said the smaller businesses that are not paying VAT are charging less for similar items and he did not see this as a "level playing field."
This store owner has registered for VAT and has started to implement it, but he noted that people prefer to shop at stores where VAT is not charged. "Some persons come to the door and ask: 'Y'all charging VAT?' and when we say yes, they leave."
Other businesspersons in Berbice told Stabroek News they are disappointed that they were not given any formal training on how to implement VAT. They said they checked at the GRA office in NA for clarification on how to implement VAT and were told that there was no one to assist them.
According to one businessman if he had not "pushed to get information I would have been doing the wrong thing."
They said persons should have been trained months before to deal with queries and that businesses should have been given a grace period to pay. According to him, he has to submit forms each month to the GRA but he has never seen the forms.
He said for VAT to work it should have been implemented gradually. He reported that his sales have dropped by 85%. This newspaper also observed that the usually packed store was practically empty on a normal shopping day.
However, a grocery store owner told this newspaper that he welcomes VAT because it is the law. He said it was just a matter of customers understanding how it works. "They [customers] are not satisfied and are making a big fuss and noise when they come into the store."
Persons are claiming that the items have a big mark-up and they refuse to buy while some persons accept the new prices, he said.