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Khurshid Sattaur
Commissioner General
Mission Statement
Our mission is to promote compliance with Guyana’s Tax, Trade and Border Laws and Regulations through education, quality service and responsible enforcement, thereby contributing to the economic and social well being of the people of Guyana. |
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Nadia De Abreu
Director - Corporate Communications Unit
Tel: (592) 227-3680
ext 222 |
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GRA troubled at irresponsible VAT statements
The Guyana Revenue Authority is troubled by continuing irresponsible statements made by prominent public figures regarding the Value Added Tax which was implemented last year.
“It is appalling that these persons including Parliamentarians and political leaders do not seem to want to understand the VAT but instead continue to mislead the gullible Guyanese populace in what seems to be intended to serve their narrow political or self interest,” the Commissioner-General Mr. Khurshid Sattaur said.
Mr. Sattaur said that it is inexcusable that Parliamentarians in particular do not understand or do not want to understand the VAT when the law to implement the new tax, had to be debated and passed by the National Assembly.
“The problem also is exacerbated from having a very “shrewd” business community which seems to want to prey on the gullibility of the public,” he said.
He said it is the view of the GRA that the ignorance fuelled by these mischievous public figures to use the “blame game” contributes to businesses charging unconscionable prices for basic commodities.
He alluded to a recent media report attributed to the opposition People’s National Congress Reform which even blames VAT for price increases on items such as garlic, milk, potatoes and even locally grown vegetables which are zero rated in law.
“Just recently, I heard of a call to reduce the rate of VAT so that the price of locally produced rice could reduce. Rice does not attract VAT. In fact following concerns by rice farmers we have agreed to grant them a zero-rated concession on spare parts for machinery used in the rice sector,” the Commissioner-General asserted.
“It therefore bothers me that persons continue to make such careless statements which only lead to the continuing exploitation of consumers by some businesses,” he explained.
The GRA wishes to once again restate the following points to clarify myths concerning VAT.
1. VAT replaced 6 taxes.
2. VAT primarily replaced the Consumption Tax that was imposed on most goods and services imported and in some cases on manufactured goods at rates ranging from 10% to 128%.
3. VAT is not a cascading tax and ought therefore to reduce the price of goods sold to consumers since the markup is charged on a lower base.
4. VAT has been zero rated on 85 items; most of them were previously zero rated under the Consumption tax.
5. VAT allows businesses to recover the tax charged on imports/purchases (input tax) from the taxes collected on sales (out put tax) and therefore businesses can operate more competitively in their pricing, compared with what obtained when Consumption tax had applied. The consumption tax was part of the cost of the goods acquired by businesses and naturally would have resulted in higher mark up being charged on commodities that are now subject to the VAT imposed at the time of the sale.
Since VAT has the positive attribute of broadening the base and also widening the tax net thereby expanding the tax roll, it is likely to contribute to increases in revenues to the state which allows for future tax reforms to take place.
Mr. Sattaur said from reports such as that recently disclosed by Banks DIH which reported increased sales it is obvious that businesses have begun to receive the benefits of the tax and hopes that such benefits would be shared with consumers.
He said explained that prior to the introduction of VAT, the tax system did not allow for much flexibility in making fundamental changes. “However with higher revenue collection there is so much that can be done to reform the other taxes. This is why we have been saying that VAT is the first major step to reforming our tax system and already we have seen a positive change to the Income Tax threshold.”
According to Mr. Sattaur, the GRA is offering those public figures an opportunity to participate in a forum to be arranged at their request free of charge so that they can become more conversant with the VAT and which will allow them to make factual statements to the public.
“We all want a bright future for our country and this can only occur if these ill informed persons embrace the VAT as was done in so many countries. Only in this way Guyana’s economy would be able to reap the positive benefit from this new tax system,” Mr. Sattaur said.
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