Three months after VAT, sales still low and prices high
Stabroek News
April 15, 2007

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Three months after the implementation of the Value Added Tax (VAT), businesses say, sales are still not comparable with pre-VAT levels.

In January and February businesses across the country reported low sales as customers complained about the additional VAT charges that increase the cost of consumer items, although VAT was widely touted by the Guyana Revenue Authority (GRA) as bringing relief to consumers through lower prices.

The Bureau of Statistics in its Urban (Georgetown) Con-sumer Price Index last month said there was an across-the-board price increase of 6.6% in January and 6.9% in Feb-ruary.

"Things haven't really changed much since then [January]," was the opinion of John Singh, the general manager of a Regent Street retail store, which had reported lower sales in January, two weeks after the implementation of VAT.

Singh, of Singh's Electronic World & Variety Store at 136 Regent Street said some consumers had become accustomed to the VAT charges but there were still consumers who refused to pay the VAT charges. He contended that, "there is nothing we can do, we have to charge VAT."

Mashramani and Easter sales though not as vibrant as last year, Singh said, were better than earlier this year. He noted that the retail sector was competitive and the VAT registered stores were facing competition from stores not charging VAT. Retail outlets were "popping up every day," he added.

The store some sold cellular phones and small electronic devices to a few tourists here for the Cricket World Cup matches from March 28 to April 9, even though the actual tourist numbers were not as many as were expected, he said.

Singh also owns Edge Electronics, which is located at City Mall and at the Buddy's International Hotel at Providence. He is hoping that VAT will bring to bear decreased prices across the country eventually.

One Corentyne, Berbice store was very concerned as consumer prices are as high as pre-VAT levels.

The manager of D. Balram (Shane) and Son General Store, at 69 A Rose Hall said at his store "customers are not getting accustomed to the tax [and] what I know is prices are not going down."

The manager also voiced the concern that his sales are "drastically down."

Among the items that are now retailed at higher prices at the store compared to last year are building materials and household items like air fresheners.

This newspaper was told that apart from the old stock in the store, on which consumption taxes were paid, prices for items bought this year such as mattresses also show increases over last year's prices.

In Essequibo, Maqubool Basir of Maqubool Basir Gas Station at Charity River Dam told this newspaper that to some extent customers were now accustomed to the tax and were paying the VAT charges without complaint. Basir said his sales had increased to some extent and he was optimistic that sales would continue to increase.

Bolos Variety Store & Furniture World at 68-71 Sun Flower Street, Wismar Linden had been experiencing decreased sales after the implementation of VAT. However, the manager said, sales were now showing signs of improvement, though they were not at pre-VAT levels. Consumers shopping at this variety store still complained about the VAT charges being "too high" and some refused to pay the VAT altogether.

The manager told Stabroek News that the store filed its VAT returns on time for both January and February and had engaged the services of an accountant to assist in this regard. All the stores that Stabroek News spoke to for this story said accountants had been employed to fill in the VAT returns and returns had been filed for both January and February.