One week after the belated November 29th announcement of government’s legislatively mandated review of the budget for the first half of 2007, the response of the private sector has been one of mostly studied reluctance to comment on the pronouncements made by the Minister.
Several weeks ago a Private Sector Commission i(PSC) source had told Stabroek Business that a pronouncement on the review and particularly on the Value Added and Excise taxes could be expected as soon as the Finance Minister made his long delayed pronouncement on the performance of the economy for the first half of this year.
The business sector, consumer advocates and opposition politicians have all commented on what they believe has been the role played by VAT in increasing the cost of living though the private sector, has been muted in its comments on the new tax measures since last October’s clash between its President Michael Correia and President Bharrat Jagdeo over Correia’s call for a lowering of corporate taxes even before VAT was implemented.
President Jagdeo has been quoted as saying recently that part of the $17 billion collected in VAT and Excise taxes will be used to bring a measure of relief to pensioners and workers who are at the bottom of the scale. At last Wednesday evening’s Georgetown Chamber of Commerce and Industry (GCC) end of year dinner GCCI President Colonel (retd) Carl Morgan welcomed the President’s announcement but repeated the earlier private sector call for a lowering of corporate taxes and a reduction in the current 16 per cent VAT rate.
Government has exceeded its expectations in terms of revenue collection from VAT by more than 24 per cent and Morgan told Stabroek Business that with the year almost at at end there was evidence that food prices had risen appreciably over the second half of 2007.
Up until now government has provided few details of the relief measures that it intends to implement now that VAT and Excise tax revenues for the first half of this year have been made public. And apart from Morgan’s statement at the GCCI dinner on Wednesday evening the various private sector bodies are yet to make any public pronouncements despite earlier indications that a statemernt would be forthcoming.
Earlier this week Roraima Airways Managing Director Gerry Gouveia told Stabroek Business that he expected that government would now take measures to lower the cost of living in the wake of the Finance Minister’s pronouncements in his half yearly review. Gouveia said that he believed that while the business sector continued to support VAT, in principle, there was evidence that a case exists for a lowering of the VAT rate.
