The Guyana Revenue Authority (GRA) says it has cleared the way for a number of hinterland airstrips to be exempted from applying the 14 per cent Value Added Tax (VAT) which came into effect on Feburary 1, 2017 to their services.
The application of 14 per cent VAT on local airfares, was criticized by the National Air Transportation Association (NATA), among other related entities which had said that it would have been prohibitive for persons seeking to travel in the interior.
Moreover, the mining and hinterland communities would have seen an increase in the prices of commodities since much of the mining goods going to the Hinterland regions are transported via planes.
NATA President Annette Arjoon-Martins was quoted in the media saying that “the big challenge to us is all of our customers who depend on hinterland transportation- for example our tourism clientele; our mining clientele- will be affected because the cost of interior travel will go up. We feel as well that this will have an effect on those sectors.”
However, the GRA is now announcing that domestic carriers can now apply to the GRA to effect the exemption for persons living in the identified areas.
Commissioner General of the GRA, Godfrey Statia, during an outreach with miners in Bartica on February 4, outlined that some 60 airstrips have been identified for VAT exemption.
Statia said that the decision was reached after meeting with domestic air travel operators. “I have exempted about 60 (domestic airstrips) after discussion with the aircraft association and the rest, once you do not show you live there you will have to pay the tax,” Statia said.
It was disclosed that the identification of the airstrips is intended to simplify the application of the VAT exemption, as Statia has outlined that “it is too hard to administer and I would not be going to the Ministry of Indigenous Peoples’ Affairs to find out who is living in certain areas and to give them specific charges.”
According to the GRA, this new measure is still to be formalised.
The application of the reduced VAT took effect on February 1, 2017.
According to the list of exemptions published on the GRA’s website, “services of transporting passengers or goods by air from one place in Guyana to another place in Guyana,” is exempted “subject to the signing of an agreement between the government and the provider of the service for persons living in rural areas.”