Finance Minister Dr Ashni Singh today took a hard line against businesses who have jacked up the prices for basic commodities even while removing Value Added Tax (VAT).
According to him, the Guyana Revenue Authority (GRA) has been given full rein to go after businesses engaged in these unscrupulous practices.
“There are a number of factors that influence prices. One of course is taxation. We, as you know, took off the VAT and reduced taxation on a number of items,” the Finance Minister reminded during an interview during the sidelines of an event this morning.
“In some cases, we’ve seen adjustments in prices, in other cases we have not seen the level of adjustments in prices that we need. I have said explicitly to the GRA that they are expected to enforce the removal of the VAT on all of the items that are now zero-rated. So, none of these companies should be charging VAT on any of the items that are zero-rated. It is against the law to do so and the GRA has been instructed to enforce this provision,” Dr Singh posited.
However, he noted that, “we don’t operate in an environment of price control”.
“What is regrettable is that some unscrupulous business, even if they take off the VAT, they’ve carried up their prices to compensate for the VAT. And that really is an extremely unprincipled thing to do,” the Finance Minister expressed.
He encouraged persons to call out businesses that are engaged in such practices.
“Because the objective of removing that VAT was not to give any business the opportunity to carry up their prices to compensate for the VAT removal. The objective of removing the VAT was to pass on the benefits to consumers,” Dr Singh said.
“Ultimately, I am hoping that competition will regulate this and that some businesses will see an opportunity to lower their price(s). But it’s something that I am speaking with the private sector about,” he added.
Back in February, the Finance Minister had announced a number of tax measures for budget 2021, that were designed to bring relief to consumers.
This had included restoring the zero-rated status of food items and basic household commodities.
Among these items were wheaten flour, basic breads, oats and cooking oil. With this, the price for these items should have dropped.