None will escape paying Value Added Tax (VAT), not even the poor as is being touted by officialdom, since VAT charges will, either directly or indirectly, impact consumers.
People’s Progressive Party/Civic (PPP/C) Member of Parliament, Dharamkumar Seeraj, advanced this position, as he delivered his contribution to the debate on the 2017 National Estimates on Thursday, calling the Government’s counter arguments in support of VAT “a fallacy.”
According to Seeraj, “Our citizens are expressing their discomfort…their disappointment and recently their horror as the Budget unfolds.”
He told the House the most recent onslaught by the administration has to do with the taxing of a basic essential for existence.
According to Seeraj, the word Guyana literally means ‘land of many waters’ but, “we are being taxed for water,” a sentiment that evoked heckle from the Government benches, “not free water though.”
Turning his attention to deconstructing arguments proffered to by Government speakers with regards the application of VAT on electricity and water, Seeraj was adamant “everyone will be paying the VAT.”
He pointed to the arguments by Government presenters that a large band of consumers will not have to pay VAT since their electricity bill is below the VATable threshold of $10,000 per month, and $1500 on water.
According to the PPP/C MP, most Guyanese utilise bottled water and therefore the suppliers of that commodity will no doubt be paying VAT which will consequently be passed on to the consumers. The same scenario obtains for electricity.
“None will escape, so this argument being put forward that you will not be paying is a fallacy…there is no way anyone of us can escape paying VAT on water.”
According to Seeraj, even if a consumer’s electric bill was to be below $10,000 per month, that person will still be exposed to bearing the cost of the application of VAT on electricity.
“You don’t live in the isolation of your home so once you purchase any manufactured commodity the cost of that VAT will be in the price of that commodity.” He was adamant that government’s argument in support of the application of VAT on electricity and water does not hold and that “Guyanese all over have pronounced.”
Not wanting to adopt the same strategy of the majority of his colleagues who have called for the withdrawal of the 2017 Budget, Seeraj instead suggested that it be taken to the incinerator and destroyed, “do that and come back fresh to this House after consulting with the people.”
He used the occasion to also lament some of the presentations by Government speakers, saying instead of focusing on the contents of the Budget, they instead sought to laud the early presentation of the Budget.
Seeraj also sought to rebut some of the arguments put forward by Government speakers such as Business Minister Dominic Gaskin, who said the People’s Progressive Party/Civic (PPP/C) had left an unsustainable growth rate in the economy.
The PPP/C MP told the House that the coalition A Partnership for National Unity/Alliance for Change (APNU/AFC), in fact, inherited an economy that had experienced sustained economic growth for one full decade during which the world was in the centre of the worst global recession in recent memory.
He said, “isn’t that testimony of sustainable development…How can a Minister of Business stand up and say we did not leave them a sustainable economy…we just have to look at the record.”
Looking to qualify his pronouncements with regard the negatives surrounding the imposition of VAT, Seeraj recalled for the House that the Minister of Finance in presenting the 2017 Budget said: “The budget was crafted to maintain and enhance revenue stream.”
According to Seeraj, the Budget is in fact crafted to tax our people more, “extreme taxation on our people that will result in them getting poorer and poorer as we move along.”
He told the House that Minister Jordan in trying to garner more revenue to meet the huge $250 billion Budget has cast his net far and wide to see where it is that the revenues will come in.
Qualifying his position, Seeraj told the House that if one were to mine gold this would be done at some interior location with proven deposits as against spinning a batel outside of the Marriott Hotel.
Seeraj said the same obtains with a rice farmer who would go to fertile lands to sow his crop as against an arid piece of land.
He said that it is in this same vein that the Minister of Finance looked to see where the bulk of the revenues can be had which eventually led to VAT being applied on electricity and water.
According to Seeraj, when the Minister sought to put VAT on water and electricity it was a studied approached that identified the two areas as viable to garnish revenue.
He told the House that the Minister has deliberately omitted to document the VAT-related figures in the National Assembly saying, “He cleverly stayed away from listing the amount that this will bring in.”
According to Seeraj, the PPP/C has conservatively estimated the windfall to be an additional $50 billion and, “that is why the Minister did not put in budget…They know very well what is going to be the outcome of these new measures that he is proposing.” (Guyana Times)