CCJ Environmental tax case: Govt ordered to refund Trinidad-based beverage company

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The Caribbean Court of Justice (CCJ) has ruled that Guyana refund Trinidad-based beverage company, SM Jaleel (SMJ) and its subsidiary Guyana Beverages Inc (GBI), over the Environmental Tax imposed, in breach of the Revised Treaty of Chaguaramas, between 2011 and 2015 which can amount to millions of dollars.

CCJ President, Sir Dennis Byron on Tuesday, ruled that the taxes levied during this period are in violation of the Caribbean Community’s (Caricom) Single Market and Economy rules.

CCJ is Headquartered in Trinidad

In handing down the ruling, Sir Byron stated that Guyana has been clearly unjustly “enriched” at the expense of SMJ and GBI, having collected an unlawful tax directly from them in clear breach of the Revised Treaty of Chaguaramas.

While CCJ did not specify the amount to be paid, it was outlined that Guyana will have to pay an aggregate sum of the amount paid by the company to the Government in Environmental Tax from March 7, 2011 to August 7, 2015 together with interest at four per cent per annum from the date of judgement.

According to Sir Byron, the Environmental Tax did not promote cross-border trade but tended to frustrate free movement of goods, distorted competition and discriminated against the companies which should have been protected as belonging to the Community.

Moreover, Guyana will have to pay 70 per cent of the cost of the court proceedings.

The company had sought to have a refund calculated from January 1, 2006 but a five-year limitation period for settlement of cases was pointed out in the ruling.

“The court holds that a five-year limitation period is appropriate and will protect States from stale claims in respect of which there would be inherent difficulties in trying to produce documentary or oral evidence.

It will, above all, encourage claimants to file suit in a timely fashion,” Sir Byron said in handing down the ruling.

Guyana’s legal team was headed by incumbent Attorney General Basil Williams, SC, while SM Jaleel was represented by Attorney Hans Lim-A-Po of Suriname.

This action comes in light of the CCJ ruling in a similar lawsuit filed by Surinamese company Rudisa Beverages, which was awarded US $6 million in compensation by the Court in 2015.

Former President Donald Ramotar under whose governance the tax was imposed, had said that the Partnership for National Unity/Alliance For Change (APNU/AFC) is to be blamed for the recent lawsuit against Government for environmental taxes.

Referencing the Rudisa Beverage claim, Ramotar had said that prior to taking Guyana to Court an agreement was reached between Rudisa and all the parties, including local companies, to cut the tax by half and apply it to all the companies operating in Guyana and a Bill to that effect was placed in the National Assembly that was at the time controlled by the then Opposition APNU/AFC which held a 1 seat majority.

“We thought that the Opposition would find no difficulty in supporting this, that the Opposition would realise the cost to Guyana’s taxpayers and support the amendment to the law. Unfortunately, the Opposition saw this as another tool to damage the PPP/C Government,” he stated, adding that despite forceful and convincing arguments by his Ministers of Finance, Foreign Affairs and Legal Affairs, the then APNU and AFC Opposition parties used their combined majority to vote against the relevant bill.

This, Ramotar outlined, resulted in the case going before the CCJ, which ultimately ruled in favour of the beverage company incurring a billion-dollar bill for the Guyana Government to honour the award.

The former President had said further that “the PPP/C had also warned that this would not be the end of the matter. It was pointed out then that some companies from Trinidad and Tobago could also take us to court because the case with Rudisa was the same. APNU and AFC seemed delighted to hear this, seeing that it would hurt the PPP/C Government. That seemed to spur them even more to vote against the amendment. As things turned out, it is those parties that are in Government now and had to pay the US $6 Million which they so delighted in imposing on the Guyanese taxpayers,” he remarked.

The former President had posited that this situation was totally unnecessary and completely avoidable; however, APNU and the AFC had displayed a strong unpatriotic stance.

“These are the parties that now wield power in our country. The level of vindictiveness and hatred is unprecedented. The cost of such an attitude is great. The bill is climbing,” Ramotar had commented.

 

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