GMSA engages GRA on VAT, other issues affecting sector

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GMSA Executives meeting with GRA Head Godfrey Statia

A team from the Guyana Manufacturing and Service Association (GMSA) led by it’s President Shyam Nokta and including Board Member Ramesh Dookhoo and Chair of the Forestry and Wood Processing Sub-Sector Rafeek Khan met with Commissioner General Godfrey Statia and his GRA team on Thursday, August 16, to discuss several key issues affecting the manufacturing sector.

GMSA, in a statement, explained that the meeting was convened as a follow up to them registering concerns to Minister of Finance Winston Jordan in June, 2018 regarding the impact of the Amendment to the VAT Act in January, 2018, on some sections of the manufacturing sector whereby, resulting therefrom, certain businesses involved in exports were unable to reclaim the Value-Added Tax (VAT) paid on inputs on the goods exported.

The GMSA contended that the amendment, contrary to what the Minister had intended and as stated in his budget speech, affected major sectors of the economy, foremost being the forestry and wood processing sector.

Moreover, GMSA posited that the VAT on such inputs serves as a dis-incentive to producers who primarily manufacture for export and comes at a time when the forestry and wood processing sector is facing several challenges including the deplorable state of interior roads and when there is strong push for more value adding to target external markets.

According to the statement, the Commissioner General indicated that in keeping with the Minister’s pledge of no new taxes and the fact that the Amendment was intended to improve Administrative efficiency of VAT administration, that GRA is exploring ways to address the issue.

It was outlined that Statia also requested that the GMSA explore other avenues and make suggestions with financial analyses rather than making broad statements since the GRA’s analysis using return submissions have revealed a negligent impact on the industry.

Notwithstanding the Commissioner General’s position, the GMSA said it stands by its position regarding the adverse impact on key economic sectors.

The GMSA also took the opportunity to raise other issues pertaining to tax administration including the implementation of the new scanner system and processing times, and put forward for consideration a request for incentives for manufacturers in relation to energy and renewable energy technologies.

It was also established that a list of procedural issues relative to facilitating the smooth flow of businesses was also given to the Commissioner for his attention in the near future.

Also raised was the issue of addressing Excise Duty on Indigenous Wines in keeping with the Government stated policy of incentivizing local manufacturing.

The issue of Excise taxes on Shandy was also discussed whereby the current structure is not in line with other Caribbean territories and has therefore disadvantaged Guyana’s producers.

The GMSA said it remains encouraged by the Commissioner General’s willingness to engage and noted that the GRA also expressed its willingness to give active consideration to the issues raised and make recommendations to the Minister of Finance on the way forward.

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