The Guyana Revenue Authority (GRA) has distanced itself from a decision to implement Value Added Tax (VAT) on exports and is challenging private sector companies to come forward with the evidence.
“All I am asking is if you’re saying that you will be adversely affected, prove it to me. Show me the facts. We are yet to see any facts. No one has brought any facts to show that they are adversely affected and thereby I would like to lay rest that there are no VAT on exports,” Commissioner General of the Guyana Revenue Authority Godfrey Statia said while addressing the media on Tuesday.
Statia claims that the GRA has been in constant discussion with stakeholders at every point in time and there is no empirical evidence to prove that VAT on exports will be implemented.
“We understand the reasons for moving items from exempt to zero rated and vice versa. In the initial phases when we made the changes in 2017, what we were trying to do was to minimize a request for refunds and therefore what we tried to do was to move exempt items, move zero rated items to exempt,” he explained.
The GRA boss nevertheless asserted that he is speaking on behalf the organization he heads and not the Ministry of Finance nor the Minister.
He did note that if businesses can prove that they are affected the GRA “will recommend to the Minister of Finance changes to the Schedule and VAT Act to minimize such effect. This is an ongoing exercise, and was the case for the fishing and forestry products industries where after being presented with empirical evidence in 2017, changes were effected to the Vat Schedules, thereby allowing the affected items in the ‘manufacturing process’ to be exempted.”
Opposition Leader Dr Bharrat Jagdeo was the first to state that serious consideration is being given to have the zero rating of exports for VAT purposes removed.
A day later Finance Minister Winston Jordan strongly denied that any changes have been made, or will be made, that will impact exporters in a negative way.
A letter sent to the Minister by the Guyana Rice Exporters Association (GREMA) pointed out that it appeared the minister was “badly misled.”
The bodies in the letter reminded the Finance Minister that it is he, and not the GRA, that bears responsibility for setting policy.
Moreover, The Private Sector Commission (PSC) on Monday in a statement, which canvassed support from, Guyana Manufacturers and Services Association (GMSA), Georgetown Chamber of Commerce and Industry Limited (GCCI) ,GREMA and the Guyana Forest Products Association (FPA), said that this specific decision made by Government and the Guyana Revenue Authority (GRA) is “ill-advised and counterproductive to the interests of the businesses [they] represent and to the economy of our country.”
“The consequence of denying VAT refunds is that the exporter must either absorb the VAT, which can make their operations loss making, or seek to recover these losses by increasing prices for their exports of the goods and services, making them uncompetitive…. We therefore consider that should the Government proceed with this policy, the country, the economy, the exporters and consumers will suffer” said the statement.