Bill to ease VAT woes tabled
By Johann Earle
Stabroek News
January 20, 2007
Amid the furore over VAT, the government yesterday tabled a bill in the National Assembly to enable additions to the list of zero-rated and exempt items by way of order but a bid to have it taken through all of its stages and passed was rebuffed.
Acting Speaker of the National Assembly Clarissa Riehl disallowed a request by Minister of Home Affairs Clement Rohee which would have seen the suspension of the Standing Orders so that the amendment to the VAT Act could be taken through all its stages yesterday.
Riehl, sitting in for Speaker of the National Assembly Ralph Ramkarran who is away for medical reasons, said that the government didn't allow enough time for the bill to be properly considered.
She said that no notice of the bill was given and because of this she was not of the mind to rule in favour of the Government side. The bill was listed on a Supplementary Order Paper. The bill will come up for second reading sometime in the coming days.
Rohee sought the suspension of Standing Order 54 which stipulates that an interval of not less than seven days must be given between the first and second readings of a bill, unless the Assembly on a motion made agrees to proceed with the bill at an earlier date.
"I am not giving leave for the bill to go through all of its stages today," Riehl said, to which Rohee said that he was disappointed. Riehl quoted Standing Order 111 as she announced her decision. Standing Order 111 which deals with suspension of the Standing Orders says that "any one or more of these Standing Orders may after notice, or with the leave of the Speaker, be suspended on a motion made by a Member at any sitting".
PNCR-1G MP Winston Murray said the Clerk of the National Assembly indicated that the Value Added Tax (Amendment) Bill No. 3 of 2007 would have been read for the first time yesterday and then brought at a later date for debate and passage. "There was no indication that the bill would have been taken through all its stages today. There was no indication [of this] on the Order Paper. We came in at 2 pm to find a bill being proposed by the Government and to find a request to have the bill taken through (all) its stages. We had no chance to submit amendments," a concerned Murray said during the discussion of Rohee's request.
Murray said that it was improper for the bill to be passed in such a hurried manner and said that the party "vehemently" objected to the passage of the legislation. He said that the MPs should all be concerned that the situation with bills being rushed through the National Assembly without proper notice could arise.
Alliance For Change (AFC) Member of Parliament Raphael Trotman said that the manner in which the bill was brought flies in the face of the Standing Orders. He said that Standing Orders 55 and 56 required the bill to be gazetted and to the best of his knowledge this wasn't done in the case of the VAT Amendment Bill. He said too that the request for a suspension must have gone to the Standing Orders Committee. "I don't see how we could proceed without the bill being gazetted," Trotman said. Later, Riehl, on the advice of the Clerk, said that the bill had been gazetted.
The acting Speaker said that the she needed time to confer on the matter and adjourned her ruling on the request until after the resumption of the tea break at 4.30.
Speaking during a break in the proceedings, PNCR-1G MP James McAllister said that the new VAT bill seeks to amend the way changes could be made to certain aspects of the existing VAT legislation. He said that the Minister of Finance would be able to utilise negative resolutions to effect changes to the legislation.
He said that the Opposition MPs had no knowledge of the bill and that it was only when they came in at 2 pm yesterday that they saw the piece of legislation. He said that there is concern that untoward provisions may be slipped in with the new legislation and that it why there is need for concern.
The VAT Act has appended to it five schedules. Schedule I lists zero-rated supplies for the purpose of Section 17; Schedule II lists exempt supplies for purposes of Section 18; Schedules III covers tax invoice, tax credit notes and tax debit notes; Schedule IV specifies the registration threshold, interest rates and other amounts for the purposes of Sections 11, 27, 28, 35, 36 and 37. Schedule V deals with the repeal of laws - Section 99.
Under the amendment bill, Section 98 of the Principal Act is being repealed and replaced by the following:
1) The Minister may by order, subject to negative resolution of the National Assembly, amend Schedules 1 and 11.
2) The Minister may by order, subject to affirmative resolution of the National Assembly:
a) increase or decrease any monetary amount set out in this Act
b) amend Schedules 111, 1V and V
Sources say that poultry and meats may be added to the list of zero-rated items and there could also be a VAT ease for interior transportation.
Riehl had earlier yesterday disallowed a request by Trotman who wanted to have VAT debated as a matter of definite urgent public importance. Giving the reason for her disallowing of Trotman's motion, the acting Speaker said that the matter should have been raised at the sitting on January 11, 2007, the first sitting of the National Assembly since the new tax regime commenced operation.
Since the commencement of VAT there have been a slew of complaints from the business community and from the 'man in the street'. The Guyana Revenue Authority (GRA), which is mandated to administer and police the tax, has been caught up in the mire of getting the public to sign on fully to VAT and getting businesses to do their part. Recently, President Bharrat Jagdeo announced that the Government, in light of the complaints, would have been making adjustments to aspects of the new taxation regime.
Another serious issue has been stock on hand at December 31 on which consumption tax had already been paid. Those who were not eligible for tax credits simply added 16% VAT on top of their old prices. Consumers generally complained that all prices had gone up by 16% and a variety of breaches of the VAT Act by businesses surfaced on January 1 and are continuing.