It is easy to empathise with the Minister of Finance on the matter of being unable to announce a decrease in the rate of the Value Added Tax (VAT) as had been promised by APNU+AFC while in opposition. After all, he assumed responsibility for a manifesto pledge which was apparently plucked out of nowhere. Minister Jordan put it in perspective at his press conference on Friday when he said “…I will say, again, you cannot wake up one night and determine that you are going to fiddle with a tax that you heavily depend on without having the benefit of a substantial study on that tax telling you by how much you can remove it and how much you will lose and what new taxes if any you would need to put in place to recover what you are losing”.
The primacy of VAT to government revenues was also starkly put by Sunday Stabroek columnist Rawle Lucas on June 22, 2014 as follows:
“To most Guyanese, the value-added tax (VAT) is an added annoyance that they could do without. They feel the pinch on the pocket every time that they buy a commodity that carries the tax. But to the government, VAT was a game-changer. Prior to the modifications of the tax structure which allowed production and consumption taxes to emerge as dominant income earners, these taxes accounted for an average of 33 per cent of tax revenues. Prior to 2007, income tax was carrying the burden with an average of 45 per cent of the current revenues. By 2008, the government came to realize that VAT could and would be an exceptional income earner. In 2003, production and consumption taxes were contributing 37 per cent of revenues as against 46 per cent for income taxes. By the end of last year (2013) production and consumption taxes were responsible for 58 per cent of revenues while income taxes were responsible for 36 per cent.
“The growth in revenues was phenomenal. From 2003 to 2013, VAT revenues grew 393 (per cent) as against that of income tax which grew 142 per cent over the same period. The introduction of VAT in 2007 enabled the government to move from the position of servant to that of master.”
The recanting by the coalition government on an immediate, phased lowering of VAT is an example of the amateurish, wide-eyed pledges so beloved of aspirants to the highest office. While Minister Jordan’s argument is perfectly understandable, the architects of this coalition agreement and manifesto, whoever they are, now bear responsibility for the eroding of confidence in this government’s solemn commitments and its ability to strategise and see far ahead. More of this backtracking on top of the many problems that are testing the government at the moment can lead to a serious loss of public confidence in the administration and undermine its efforts to engage with the broader society in a trusting relationship.
While it has made significant strides in the warmth of the goodwill that greeted its accession to office, the coalition has to be ever mindful of slipping into the pitfalls which it so trenchantly criticised the PPP/C for. One of these was the shadowy, grey area of private financiers and hangers-on looking to dole out favours or to be favoured. In the aftermath of the APNU+AFC election victory various personalities surfaced offering services and melding with key decision makers and important events. Some were politely waved off while others are recurrent features.
To avoid the hazards of influence-peddling, outright bribery and the undeserved elevation of the unqualified, the APNU+AFC government must align itself unswervingly with a different culture. Valid questions were raised about who financed and to what extent the large public inauguration of President Granger at the National Stadium. Much of it might have undoubtedly flowed from the pockets of well-wishers who sought nothing in return and will not do so in the future. Chances are however that this will not always be the case. The best disinfectant for any dishonourable motives is sunlight. Surely, the arrangements couldn’t have been so haphazard that no one in the APNU+AFC transition team was making a note of who was providing services gratis, cash and other help. It would have been an excellent start in public accountability if the administration had swiftly published as much information as possible on how much of this ceremony was funded by the state and how much by the others still unknown.
It is not too late for this to be done, moreso as the administration has had other engagements in the diaspora which will raise similar concerns over who was footing the bill and in exchange for what. During its first outreach to New York, Minister of State Harmon rejected the view that the visits of the ministers would have been at the expense of the taxpayers. All well and good but the public has a right to know for accountability and information purposes just who covered transportation and accommodation expenses and on what basis. The same holds for the recent trip to Canada. The diaspora has historically played an invaluable role in all facets of the country’s life and it, too, will no doubt appreciate the vital importance of ensuring that no undue influence is brought to bear on the affairs of the country. As long as missions overseas by ministers are deemed important, the state should be meeting all of the expenses and these visits should not be seen as APNU+AFC events. These are matters that a vigilant Office of the Auditor General and a vibrant Public Accounts Committee of Parliament should take a deep interest in.
It is in the interstices of unaccountability that individuals like Mr Khamraj Lall, now facing multiple charges from cash smuggling to drug trafficking in three different US jurisdictions, end up having access to prized facilities such as a private hangar at the Guyana’s main international airport. Such dealings without a hint of due diligence and clearly advanced through high connections are to be avoided at all cost.
Finally, while a flag for each region of the country sounds inspiring and harmless enough, in a milieu where local government has been degraded to the dregs there are many pressing areas that should be addressed in preparation for long-awaited local government elections: training on local government laws, accounting, relating to members of the public etc. The list is daunting and an expansion of vexillology should not be on it. The Ministry of Communities should focus on other priorities. The PPP does make a valid point about the reinforcing of closeness with the national flag in light of Venezuela’s extravagant aggression and threat to issue ID cards to Essequibians. That is the only flag that the Ministry of Communities should be focusing on at this point.
