Value Added Tax (VAT) registered businesses on the West Coast Demerara have mostly retained their last-year prices, fearing new prices would be too high for consumers.
Leeza Basani, manager of Basani’s Traders at 28 ‘B’ New Road Vreed-en-Hoop, WCD said that store has maintained its prices inclusive of VAT because it would be “tough for the customer” to afford increased prices. The bills being issued by Basani’s Traders do not have a breakdown of the VAT being charged and the manager said that they were not told that this was a requirement.
The manager said the store will absorb the VAT cost on the old stock until new stock arrives, adding that “businesses are stuck in the middle.” At Basani’s the original VAT registration certificate was displayed along with notices which say that the prices are inclusive of VAT.
Payless Variety Store at 28 New Road, Vreed-en-Hoop only had price changes on items purchased this year; the old prices remained on last year’s stock. “We don’t want to raise our prices to customers,” Manager Kennard Sahadeo said, explaining that the mark-up was sufficient to bear the 16% VAT to pay the government. Most of the customers, it was also noted, are from the community and are regulars.
He said that in another two months all the old stock should be exhausted and added that the prices of the majority of the items being sold at the store would be lowered since the duties would be lower.
However, the prices of some snacks purchased this year have already increased since the applications of VAT by the suppliers have increased those prices. For instance, Sahadeo said, stock purchased from Demerara Distillers Ltd was inclusive of VAT and the cost increased. He said this VAT cost will be passed onto the customer. In this instance, the store will have to minus its VAT cost, add its mark-up then calculate 16% of that sum for the VAT and not leave in the VAT and then compute 16%. The business had its VAT inclusive notices up and its certificate displayed.
At Frontier Traders at 29 B Vreed-en-Hoop, co-owner Shanta Paul, said she had applied for a VAT certificate, but her registration is still to be issued. She said the store will not charge VAT until the certificate is issued and as such all her prices remained the same. She said once the price on any stock imported this year was lower it would be reflected in the retail price.
Rahaman of Wolf Furniture Store at Leonora Public Road who sells items on hire purchase said that he was not charging VAT on those items sold last year only on those items bought this year. Wolf Furniture Store is registered and is charging VAT on the old price. Rahaman said two or three persons were already charged VAT on last year’s prices.
Rahaman said the prices would be lowered but he could not say how soon since he has old stock. The businessman complained that customers were already not purchasing his products. Customers, he said, believed the VAT is for him and do not understand that he is collecting it for the government. The store had a clearance sale on selected items and notices around the store said that the prices were not inclusive of VAT.
At Uitvlugt Front, Avon DVD and Video Club is registered to charge VAT but had not yet begun to do so. A representative of the club said that the manager had left the VAT bills and she knew how to calculate the VAT but was not charging it. Stabroek News observed that the representative was able to compute the VAT. The representative did not give a clear reason as to why the video club was not collecting the tax.
It also had no signs notifying the customer if the prices were VAT inclusive or exclusive.
The DVD Club is located within a store which has also applied to the Guyana Revenue Authority (GRA) for certification to charge VAT. The store’s manager told Stabroek News that she has the VAT registration number but not the certificate, so she was not charging VAT. She also said that once her prices decreased she would pass on the benefit to the customer. She advocated more VAT education.
At Patsheed and Son Grocery General Store and Supermarket at Lot 3 La Jalousie WCD, the VAT registration certificate was not visible but the manager told Stabroek News that it was being laminated and showed this newspaper the GRA letter stating that she had registered. The manager, who did not state her name, said she had not increased her prices because sales were already slow. There were also no signs stating if the prices were VAT inclusive or exclusive.
Stabroek News informed the manager that she would have to remit VAT to the GRA even though she had not begun charging it and she then informed her customers present that her prices may have to increase, since her mark-up was small.
Stabroek News observed that at some VAT registered businesses on the West Coast that no bills were being issued.
VAT in the city
City businesses also continue to operate contrary to the VAT requirements. The most prevalent violation that Stabroek News observed is that businesses are still not stating the amount of VAT the consumers are paying on their bills and just a total, especially for sales under $10,000.
At Police Consumers Co-operative Society Ltd Supermarket on Robb Street the VAT amount paid is not separated from the cost of the item. There is no description of the item nor is the VAT amount or the initials VAT displayed. This is a violation of the VAT requirements. The supermarket is registered to charge VAT. It has its TIN on the bills and displays its certificate but does not have the words sales invoice for sales under $10,000 on its bills. Upon inquiry Stabroek News was told that the sales machine is not configured to show VAT.
Consumers have a right to demand refunds for VAT paid if the amount cannot be properly displayed on their bills.
Pressy’s Enterprises continues to charge VAT on old prices without subtracting the Consumption Tax (C-Tax). For example, the company charged its last year price of $140 for a 6×8 print and computed 16% of this for a total cost of $162. Upon inquiry Stabroek News was told that the material to process the print carried a 10% C-Tax and at 16% VAT its cost would have increased.
In this instance Pressy can choose to add 6% on its old price and the consumer would pay 16% instead of 10% C-Tax and 16% VAT, a total of 26%.
The bill that Pressy issued, also had tax invoice and not sales invoice as is required for sales under $10,000 for persons who are not VAT registrants. Businesses also continue to display photocopied VAT registration certificates or display their VAT number on a piece of paper.
Five days after VAT was officially implemented three businesses have already been named as defaulters and another two will be put before the court on Tuesday.
VAT invoicing violations has landed Muneshwer’s Ltd and N P Department Store before the court. Although representatives of both stores claim the violations were corrected after they were told of the lapse.
A large number of businesses continue to breach invoicing requirements. For example, Stabroek News in many instances observed that businesses carrying VAT registration certificates, have failed to put the words sales or tax invoice on their bills, and in the case of sales over $10,000, have failed to put the names of the buyer; the TIN; a description of the item/s or the words tax invoice at the top.
