The membership of the Linden Utility Services Co-operative Society Ltd (LUSCSL) and residents of Wismar have rejected a proposal to levy VAT on electricity in their community and they plan to meet the intended deadline for compliance with the implementation of the rate increase with protests today.
According to the LUSCSL in a press release, residents of Wismar, Linden are adamant that they will not accept government’s proposal to make them the only community to be subjected to VAT payments on their electricity supply. There has been no response from the government on this contention.
The co-op society said that the Guyana Revenue Authority (GRA) wrote the society on January 29, 2009 stating that LUSCSL, which had been distributing electricity at Wismar for the past 50 years, was not authorized to treat the supply of electricity as zero-rated.
This in effect, the society noted, means a 16% electricity rate increase for Wismar residents but this position was unanimously rejected by the LUSCSL membership and other Wismar residents at a specially convened meeting last Thursday.
Moreover, the society has pointed out that they purchase electricity from the Linden Electricity Company Inc. at a rate that does not attract VAT payments and the residents at McKenzie do not pay VAT on electricity.
The LUSCSL also expressed concern that only residents of Wismar are to be saddled with such a rate increase which is not levied in any other part of Guyana.
According to the LUSCSL, this situation has come about because the society is not registered under the Electricity Sector Reform Act of 2005, but they had applied several times for a distribution licence as a precursor to acquiring this registration, between 1996 and again as recently as in 2008, but approval of the application had “been delayed for reasons unknown.”
Meanwhile, residents and the LUSCSL are calling on the GRA and government to revisit what they called a “unilateral decision” to impose the increase on Wismar residents. They are also calling on their representatives in Parliament, Vanessa Kissoon, and Prime Minister Samuel Hinds, who also has responsibility for the electricity sector, to address this issue urgently.
