Introduction
As the life of the Ninth Parliament comes to its constitutional end later this week, Business Page thinks it opportune to review its productivity in terms of its legislative agenda. My emphasis will of course be on legislation directly or indirectly relevant to financial and business issues and mainly on new legislation rather than on amendments and on primary legislation (Acts) rather than subsidiary legislation which comprise Regulations, Orders and Notices.
Legislation is one area that gives some indication of government policy but not necessarily so. Take for example the Value-Added Tax that was introduced in 2007; that was as much an imposition of the international financial institutions as a reflection of meaningful tax reform to widen the tax net. In fact VAT is a highly regressive tax and comes on top of a personal income tax system that is only a shade less regressive. In other words, those people paying personal income tax suffer twice from the “tax reform” – with high rates of VAT coming on top of high personal tax rates. But government policies are not reflected only in legislation. For example the government uses public moneys to support the rice and sugar industries partly for political reasons but these are not reflected in any specific legislation.
$10 million for ACDA
Here are a couple of examples taken from this past week. Two financial papers were submitted to the National Assembly, one for $1.153 billion which includes a $500 million provision for Amerindian development projects and programmes. The other was for $951 million including $209 million to “assist GuySuCo to pay severance pay to sugar workers of Diamond Sugar Estate” and $10 million – yes, $10 million – to provide financial support to ACDA in connection with the activities connected to the International Year for People of African Descent. What is surprising is that all of this is presented to the National Assembly simultaneously while the political opposition has disengaged from the process.
What is also worth mentioning is that all these sums are listed as advances made from the Contingencies Fund which suggests that they have already been paid out! This is not how advances from the Contingencies Fund should operate but then this is nothing new. Each year the report by the Auditor General speaks of abuse of the Contingencies Fund and the next year it gets worse.
Dr Singh’s first
A good starting point is the first budget speech of the newly appointed technocratic Minister of Finance Dr Ashni Singh, who outlined the government’s agenda for that year, and for the medium term. In the introduction to his speech, the Minister reported that the 2007 Budget “concretises our vision of a modern and equitable society for all Guyanese” which he described as “a Guyana where our people live in perpetual harmony, enjoying greater cohesion and prosperity… and a society that is recognised for the care and attention it places on children, women, youths, the elderly and the less fortunate.”
In his concluding remarks Dr Singh said that the stage had been set for accelerated development in Guyana over the next five years, and that the agenda he outlined reflects government’s determination to diversify the economy to achieve “high and sustained growth rates, create jobs, promote employment, reduce poverty, and improve standards of living.” In a later column I will explore the success of the economic measures but for now will concentrate on the legislative measures.
2006
The first few months of the new parliament were quite slow and there was hardly anything of business significance addressed in the period September 28 to December 31, 2006. One significant piece of legislation passed earlier in the year was the Competition and Fair Trading Act establishing a body corporate called the Competition Commission. My enquiries about the functioning of this commission have all drawn a blank.
2007
Ram & McRae considered that only five of the Acts passed in 2007 were of business interest and not one of them constituted substantive legislation. The five amended the Gambling Prevention Act, the Value-Added Tax Act, the Income Tax Act, the High Court Act and the Deeds Registry Authority Act.
This does not mean that the amendments are not important. For example the amendment to the Gambling Prevention Act allowed for what was referred to as “regulated gambling” but which many Guyanese cynically referred to as the Casino Gambling Act. The Minister did not refer to casino gambling in his speech or to the proposed new hotel which many had considered as the raison d‘être behind the decision to go casino. The licence went to Mr ‘Buddy‘ Shivraj who subsequently sold the hotel after establishing Guyana’s first casino.
The amendment to the Deeds Registry Authority Act, which at that date had not been brought into force, removed the functions of the Registrar of Deeds in relation to the Land Registry Act, Cap. 5:02 and brought section 5(2) of the Deeds Registry Authority Act into compliance with the constitution.
Confusion still surrounds the Deeds Registry Authority and has brought some sharp exchanges – but no resolution – between the legal profession and the Minister of Legal Affairs.
2008
There were four Acts of business interest passed in 2008, all amending various tax Acts and the Telecommunications Act. They were not without their significance however. For example one was to allow the Minister of Finance to make regulations for remitting any tax payable by a person or category of persons on such income, in respect of any year of assessment, and in accordance with such specified conditions subject to negative resolution by the National Assembly. No such Regulations have been made to date.
The other one generated considerable interest and humour after President Jagdeo publicly mocked Mr Yesu Persaud’s (lack of) knowledge of taxation and instructed Mr Winston Brassington to hold a seminar for Mr Persaud and others. It turned out that it was Messrs Jagdeo and Brassington who needed to be educated about taxation and more specifically about the provisions of the law relating to the granting of tax holidays.
Readers will recall that the background to the amendment was to make legal the illegal tax concessions that had been granted to one of the President’s friends, the Ramroops to facilitate some new businesses including the start of the Guyana Times which has since generously repaid the President with more than a fair share of hagiography.
Little did Guyanese know at the time that the shadow of Mr Fip Motilall also hovered over this Act which not only expanded the activities eligible for tax holidays to cover infrastructural development, including “the production of electricity using renewable sources of energy range” but allowed for tax holidays for periods longer than ten years in the case of “infrastructural development, including the production of electricity using renewable sources of energy.” Just what Mr Motilall would have wanted.
This was a busy year for the National Assembly as it passed forty Bills including thirty-five from 2009 and five from 2007 and 2008. The major pieces of business legislation passed during that year were the Anti-Money Laundering and Countering the Financing of Terrorism Act, the Insurance (Supplementary Provisions) Act and the Money Transfer Agencies (Licensing) Act.
The Anti-Money Laundering and Countering the Financing of Terrorism Act provided for the establishment of a Financial Intelligence Unit (FIU) with a director, an attorney-at-law, and an accountant appointed by the Minister of Finance, and other personnel appointed by the director. It is unclear what this unit has been doing since its establishment in the light of glaring evidence of money-laundering across the country. With money-laundering a sibling of organised crime, setting up the FIU as essentially a one-person operation was clearly doomed to failure.
The Insurance (Supplementary Provisions) Act replaced the Commissioner of Insurance with the Bank of Guyana, as the authority to administer the Insurance Act 1998. Readers will recall that the previous holder was driven out of the country and the government decided that as in Trinidad, the Bank of Guyana should take over supervision responsibility for the sector.
The Bank of Guyana was also entrusted with additional responsibilities under the Money Transfer Agencies (Licensing) Act which requires a prospective money transfer agency to apply annually to the Bank of Guyana for a licence.
The Bills of Sale (Amendment) extended the renewal period of Bills of Sale from once yearly to once every three years.
The Bank of Guyana saw its workload further expanded with the passing of the Credit Reporting Act providing for the establishment and regulation of credit bureaus. Any person seeking to engage in such an activity must obtain a licence from the Bank of Guyana. Only an incorporated entity may carry on the business of a credit bureau and the Act provides for such a bureau to be subject to strict rules of confidentiality, data quality and security, supervisory inspections, etc.
Another piece of legislation of some interest is the belated bringing of the New Building Society under the Financial Institutions Act. To keep out trouble-makers, the Act also increased from “10% of the membership or 50 members, whichever is less,” the number of persons who may requisition a special meeting, to 10% of the entire membership. This meant that 10,000 members would need to sign requisitioning a meeting, effectively dispensing with the possibility of members being able to requisition a meeting.
And in an effort to encourage lending to small businesses, the Fiscal Enactments (Amendment) Act exempts from taxation all interest earned by approved small business lending companies.
2011
Finally Guyana has a freedom of information act called the Access to Information Act. The government did not accept the recommendations of organisations like the newly established Transparency Institute of Guyana Inc and individuals dissatisfied with the Bill on which public comments were solicited. It seems clear that the Act is intended not to be of any use as it makes access to information difficult and potentially expensive.
For some time the President had been threatening to liberalize the telecommunication sector, something that would have been welcome to many, but put the government on a collision course with the Guyana Telephone and Telegraph Company Limited.
At the last minute, the government backed off. That must now wait while Guyana goes into elections mode.
