Describing some of what he had seen as disturbing, Commissioner General of the Guyana Revenue Authority (GRA) Khurshid Sattaur on Tuesday slammed businesses in Berbice that are charging VAT on zero-rated items and he acknowledged that people in the region did not seem to understand the tax.
He told sugar workers on the Corentyne on Monday and at Blairmont on Tuesday that the errant businesspersons would be prosecuted. Calling the businesses accused of non-compliance “unscrupulous and indisciplined”, he urged consumers to “police” those businesses.
Booklets of zero-rated items were distributed to the sugar workers and there was a scramble to obtain copies. The commissioner told them that now they are aware of what items do not attract VAT they should call the GRA numbers available on the booklet to make complaints.
“We would publish the names of businesses that continue to flout the law. If you expose persons for doing the wrong things their businesses would be boycotted,” he said. The GRA has said it would publish the names of VAT defaulters but this has not happened as yet.
Sattaur told the workers, who were thinking of protesting because they say VAT is “causing a strain on we pockets”, that there is a misconception that they would be taxed twice – through their wages and at the shops.
He informed them that they had been paying 30% consumption tax without realizing it and now they would only pay 16% VAT. He said over 400 items were taxed at 30%, but the system was poorly administered and the money was not going to the GRA.
Sattaur told the workers that with the implementation of VAT they ought to be paying less for items in the shops. There was a loud uproar as workers insisted that this was not the case.
Some of the workers asked for price controls on items, but the commissioner general said there can only be price control if consumers shop at businesses that have good prices.
Minister of Agriculture, Robert Persaud who also met the workers assured them that VAT was not intended to put more pressure on consumers but to ensure that businesses do not escape from paying taxes to the GRA.
Meanwhile, during a press conference at State House in New Amsterdam on Monday, Sattaur told reporters that not many businesses in Berbice had registered for VAT. Based on his observation, he said, he would be revisiting his strategy on the VAT implementation process in the county.
Sattaur said his visit to Berbice was an experience on one hand and disturbing on the other. He called the situation peculiar, stating that the general population seemed not to understand VAT.
He recognized that there needs to be more training in Berbice and said officers would continue to pay regular visits to gain feedback since “it is a serious matter”
The commissioner is confident that once owners of businesses comply with the laws such as displaying certificates and prices and issuing receipts the tax would work. He said VAT has proven successful in over 50 different countries. He said many businesses in Berbice are making excuses that they were not registered because they do not earn $10 million per year or they have not received their VAT certificates.
Responding to a question about why the tax was not implemented at a lower rate and then gradually increased, Sattaur said the process was guided by international consultants “under careful planning.”
Further, he said it would have been a disaster to implement the tax gradually and that the 16% rate is not the problem.
According to Sattaur businesses that are registered for VAT would offer a far more competitive price. He complimented Stabroek News for highlighting businesses that have reduced their prices, and then charged the VAT.
Minister Persaud who was also present at the press conference said he learnt during his meetings with sugar workers in Berbice that items that should not attract VAT have “skyrocketed.”
He said government is looking at having trucks set up distribution points in East and West Berbice with items that do not attract VAT. He said this method would bring some type of equilibrium to the market and the business owners would be forced to adjust their prices.
