There are none so deaf as those who will not hear. This truth is being brought home very clearly to consumers. Over and over again their hopes that some changes will be made in the rate of Value Added Tax (VAT) are dashed to pieces in the passage of time.
First, we had the not surprising news that the tax collection for VAT was way above expectations. What better reason for reducing the tax so that the tax collected would be nearer to the anticipated amount? No change occurred. Instead, we were treated to a learned treatise showing that the amount collected was based on tax that was due from defaulting taxpayers.
Then we had the shocking report that inflation reached 13.3 per cent. This, again, seemed a good reason to lower the VAT rate. Again, we were destined to be disappointed. The Finance Minister and Chief Statistician cleared the air on the 13.3% increase of the Consumer Price Index. The report in the Guyana Chronicle September 25, 2007, reads:
“So far this year overall price levels, as measured by the Consumer Price Index (CPI) increased by13.3 % between December 2006 and July 2007 with half of this increase coming in the month of January alone when the Value Added Tax (VAT) was first introduced.”
It went on to say:
“In an invited comment Minister of Finance, Dr Ashni Singh and the Chief Statistician, Mr Lennox Benjamin, clarified that the movement in the price index up to July does not mean that this will be the trend of inflation at the end of the year.
“In this regard, they further elaborated that there are a number of points that need to be taken into account when analyzing the CPI. Firstly, unlike last year’s level of inflation where the number of increases were generally small but upward moving, the trend in 2007 has been one of swings i.e. peaks and troughs from the high point of 6% in January to less than 0.4% in each of the next two consecutive months and then climbing to a second peak of 2.5% in May. Since then prices have shown definite signs of deceleration.”
Dr Singh expects that there will be a decline in prices in December. He is not good at predicting, as he expected no significant rise in the cost of living through VAT. Businessmen will tell you that there is a marked drop in the purchase of non-essential items. The voices of consumers are not heard and the 16 per cent Value Added Tax remains.
There have been zero-rated essential food items. However, the prices of these items have increased as every housewife knows. Local foods, although zero rated have increased as vendors have to recoup the extra money that they spend to keep their families healthy.
The government could not have anticipated the worldwide increase in some essential food items such as milk. Fernleaf which seems to have been the favourite with consumers has increased to $600 or more. A large bag of Kerrygold milk has also increased to $600. Milk is essential for children and parents have to cope with a large increase.
The Guyana Revenue Authority has published a list of zero-rated items, but unfortunately it is printed in black on a dark green background and one finds difficulty in reading the list. Com-puters are zero-rated. This includes the monitor, modem, mouse and keyboard, CDs, DVDs and cartridges. The UPS is not included. Internet Service Providers had to apply for a waiver of the VAT for their customers’ fees.
One does not dare to wonder what is happening to pensioners who have no other income but the $3,765 old age pension. The statement by CCWU and UAAW, “The reality is that poor consumers can’t cope,” will bring no reduction in the tax. “There are none so deaf as those who will not hear.”
