VAT moving slowly to Lethem -transport costs up
By Gaulbert Sutherland
Stabroek News
January 16, 2007
As Georgetown and the rest of the coast grapple with the Value Added Tax (VAT), there have been few changes in prices of items sold in the border community of Lethem though businesses are warning consumers of increases in prices soon. Meanwhile, transportations costs have risen and consumers are wary as a result of them not having knowledge of the new tax system though Stabroek News was told that forums to discuss VAT in the Region Nine (Upper Takutu/Upper Essequibo) community are being organized.
Speaking with Stabroek News by phone from the community near the Brazilian border, a few business persons said while VAT is "the talk of the town" currently a lack of education about the tax has hampered implementation while a few are still in the process of registering or awaiting registration certificates. VAT should have been charged on all eligible goods and services beginning January 1 this year.
President of the Rupununi Chamber of Commerce and Industry (RCCI), Daniel Gajie told Stabroek News on Sunday that generally there has been no change to prices in items sold as registered businesses were now receiving their certificates and disclosed that businesses were keeping the same prices on the items since they are using the stock bought before the implementation of VAT on January 1. He pointed out however, that once the businesses start bringing new items from the coast, then changes in prices would be seen. He stated that while prices were likely to increase in the short term, in the long-term it would "balance-out" and the benefits felt by everyone. He said that the RCCI had "done some amount of work" and eligible businesses are registering. Commenting on consumer education, he stated that the Chamber had done some education on VAT as had the Customs officer stationed there. He also stated that the Guyana Revenue Authority (GRA) had indicated that personnel would be present there before the end of the month to "fine-tune" the implementation of the tax. Currently, he said, there were at the most eight businesses in Lethem eligible to charge VAT.
Meanwhile consumers there are worried about VAT saying that there should have been more education about the new taxation system. A few prominent Lethem residents told Stabroek News that there was virtually no consumer education about the tax. Shirley Melville, former GAP Parliamentarian stated, "People still need to be educated on the matter; they are still not clear about it", while noting that a few businesses have been registered and are displaying their registration certificates. She said that while there have been a few increases in prices, overall prices remain the same though transportation costs have increased with a price of a bus ticket to Georgetown now at $10,440 up from a previous cost of $9000. She also disclosed that a number of businesses are warning customers of an imminent increase in prices as transportation costs rise and stock bought before January 1 diminishes. Stabroek News was informed that to transport a truckload of items from Georgetown to Lethem costs in the region of $130,000. She reiterated that there was no consumer education about the tax and as a result people are still trying to understand what it is all about. Another citizen, echoing Melville also declared that "nobody has been briefed except for a few by the customs officer". They however noted that a VAT education meeting was being organized and is due to be held before the end of the month. While saying that they weren't affected too much they declared that the real impact of VAT would be felt at the end of the month when the current stock is depleted.
A clerk, who declined to be named, said that when visiting a few businesses, she had been warned that shortly there would be increases in prices. She stated that no one undertook to educate consumers about the tax and declared that there should have been at least some dissemination about the tax to consumers saying she is "still not sure what it is about". She told Stabroek News of two registered businesses that she had visited, namely R & R Hardware and Trans Guyana Airways that have displayed their registration certificates and were charging VAT. She said there was a breakdown of the prices on the bills issued by those companies.
She noted that as a result of the lack of knowledge a few unscrupulous persons are increasing prices of locally produced items while blaming it on VAT. She too declared that there should have been more education on VAT as many people are worried and were not too certain what it was about.
Speaking with Stabroek News earlier last week, businesswoman Linda Khan said that her two businesses have not yet been registered and she hopes to register them with the GRA when she travels to Georgetown later. She, however, stated that as Lethem had no access to local television or radio, she was uninformed about VAT and declaring that "I don't want to do something that I know nothing about" stated that GRA staff should have been in the community to educate people about the tax. However she said she had no problems implementing it once it was explained to her what it was about, something she said should have been done long before. Currently businesses owned by other members of her family have been registered and are charging VAT.
Meanwhile, even as items imported from Brazil for use in the Rupununi are generally not subjected to any tax, a few persons this newspaper spoke with forecast that prices would increase anyway. They too declared that something should have been done to educate persons more about the tax.