Dear Editor,

We refer to the letter captioned “There are many grey areas regarding zero-rated items” (06.12.27), a copy of which you had sent us for our comments.

The writer declared that he contracts business with government agencies and enquired whether such agencies will be exempt from paying Value-Added Tax (VAT). Under Schedule 1 of the VAT Act the following are listed as zero rated supplies as it concerns provision of services and goods to government agencies:

(a) Goods when imported and consultancy services supplied to the state, an agency of the state or a local government, so long as such services or goods are funded by grants or loans from a public international organization;

(b) Works and consultancy services purchased by a budget agency named in the schedule to the Fiscal Management and Accountability Act 2003. (See an attached list of such agencies – editor’s note: the list includes the government ministries, the service commissions, some government offices and the regions).

With respect to zero-rated items for “education purposes”, the Act specifically names certain items which it considers commonly used for educational purposes. Whether these items are in fact used by the consumer for educational purposes or not is extraneous. Therefore, only those listed will be charged VAT at a rate of zero-percent.

The question of whether a printer cartridge is also an item for educational purposes was also raised. Printer cartridge is not listed as an item for educational purposes. However, the law specifically zero rates toner cartridge and ink cartridges for computers.

If you require additional information or assistance on VAT, please contact us at 210E Charlotte and Albert Streets or by telephone 227-7867, 227-7672 and 227-3696.

Yours faithfully,

Mrs Deanah Matthias

Assistant Commissioner (ag)

Legislation, Tax Advisory Services

& Objections

Value-Added Tax and Excise Tax

Department

The Guyana Revenue Authority