Berbice businesses see sales drop over VAT
By Daniel Da Costa
Stabroek News
January 25, 2007
A number of businesses across Region Six (East Berbice/ Corentyne) are experiencing a downturn in sales following the introduction of the controversial Value Added Tax (VAT) on January 1 with consumers complaining that prices of certain commodities have skyrocketed way above their earning power.
Visits to some major supermarkets and business outlets where shopping space was once a difficulty particularly on weekends revealed only a handful of buyers. Some business persons told this newspaper that sales had dropped significantly since the introduction of VAT. A number of consumers to whom Stabroek News spoke said several unscrupulous business persons are exploiting them by charging both Value Added Tax and the old Consumption Tax on certain essential items.
The irate consumers, most of them from the working class, said that some businesses are charging VAT on items that have been declared as either Zero-rated or VAT-exempt. Some they claim are charging 16 percent VAT on the total cost of goods purchased and not on individual items. Others are purporting to charge VAT by issuing pieces of paper in lieu of cash register receipts indicating that VAT had been charged on the item [s]. This is an indication, the consumers say, that these businesses are attempting to defraud the government since they have no record of charging VAT on their sales. However a few supermarkets have so labelled items that attract VAT but the actual cost of the items is not indicated inclusive of VAT.
The absence of a posted list of items that are Zero-rated or VAT-exempt at business places, consumers argue, opens the possibility of them being charged VAT on these items since it is almost impossible for them to mentally recall in their minds all of these items. They are calling on the Guyana Revenue Authority to make it mandatory for registered businesses to post the list of Zero-rated and VAT-exempt items at convenient locations in their buildings. In some cases retailers who are not registered and who are therefore not required to charge VAT have increased their prices of essential items including foodstuff arguing that they had to purchase the goods at higher prices from wholesalers. It would appear that the longer the distribution chain, the higher are the prices of the commodities.
Stabroek News also found that some businesses while not charging VAT have increased the prices of a number of commodities without giving consumers any explanation. In a few cases some registered businesses dropped their prices after reports were made to the GRA headquarters in the city. However there is an obvious shortage of GRA staff in the region to effectively monitor the implementation of the tax, to address any problems consumers might face and to ensure that businesses are not in breach of the law and are not exploiting the public. This, Berbicians say, has provided some unscrupulous business persons an opportunity to exploit consumers.
Some business persons told this newspaper that they are forced to include both Consumption Tax and VAT in their prices for some items since they had already paid Consumption Tax on them last year. Both consumers and business persons across the region are still trying to come to grips with the new system. Some business persons are still not fully au fait with the ramifications of the system while others say they are still in need of more information and explanations. Two Saturdays ago an official of the GRA met with business-persons in New Amsterdam and sought to explain the system and how it should be implemented. However some members of the business community are of the view that the one-off forum would not suffice and more such sessions would be required to ensure that the community fully understands the system.
The common cry across the region from consumers is for more protection from the GRA from unscrupulous business persons who in the absence of constant surveillance and monitoring are bent on exploiting the public using VAT as their weapon. As the end of the first month of VAT nears, businesses have already begun to count their losses with consumers feeling the pinch from its introduction while hoping for some relief from spiralling prices.