As the Guyana Revenue Authority (GRA) and the Private Sector Commission (PSC) continue to trade barbs over the implementation of the Value Added Tax (VAT), Commissioner General Khurshid Sattaur has rejected the claims of the business community over who is to blame for the VAT hiccups.
In the latest episode of the feud, Sattaur said that the PSC has made grossly misleading statements which created the impression that the high prices being experienced are to be blamed on government. President Bharrat Jagdeo said on Saturday that taking into consideration all that is being experienced, the government may make interventions and adjustments to aspects of the tax.
In a televised statement on Saturday, the Commissioner General said: “If that is so then how can the [PSC] explain the price of bread, a commodity that is zero-rated and for which a leading manufacturer was distributing a loaf of bread for $152 at the same price at which it was distributing a loaf of bread before the implementation of VAT, yet while a loaf of bread was being retailed to consumers at $180.”
He said that some places are retailing the same bread for $220 even though this commodity is zero-rated. “This is just one example where the prices of basic commodities including food items have increased either at disproportionate levels or ought not to have been increased in the first instance because they continue to be zero-rated.
He said that the PSC press release is also mischievous since it tends to “create the misguided impression that all the businesses are doing are collecting and remitting the VAT.” He said: “The general public should know that when businesses collect the VAT they are allowed in the first instance to use such sums collected to set off what has been paid by them as VAT for their own purchases of taxable supplies.”
He said that as such only the net collection is required to be remitted on a monthly basis. Sattaur further emphasised that businesses once they are registered to administer the VAT, benefit from having their own payments of VAT refunded to them, through funds that would have been collected in the administration of VAT arising from their sales.
“We would greatly urge the PSC to take the time to study not only the system of taxation pertaining to the VAT, but also rather than seek to blame the government and consequently the VAT for the kinks that are occurring since VAT implementation occurred, enquire into these unscrupulous business practices of some businesses who are exploiting the consumers and blaming it on the VAT.”
The PSC in a release last week expressed to the government its dismay at what it called “highly irresponsive and dangerously provocative statements” made by Sattaur. The release said that these statements were intended to lead the public to believe that it is the business community that is responsible for the increase in prices of goods and services following the imposition of VAT.
“The PSC has pointed out to government that these statements have resulted in consumers threatening violence at business places which are obligated by law to apply VAT to goods and services. The PSC has urged the government to publicly correct the false impression being made to the public,” the statement from the PSC said.
