– Jagdeo says no need to lower rate
President Bharrat Jagdeo has attributed the recent increase in VAT collection by the Guyana Revenue Authority (GRA) to the growth of the country’s economy and says that there is no need to revise the 16% rate at present.
“I don’t see any need, at this point in time, to revise it,” Jagdeo said on Friday while responding to a question during a press briefing at Office of the President. “We don’t think VAT is a burden because of what it replaced,” Jagdeo said, noting that it replaced five taxes, including the consumption tax on items.
Opposition parties have repeatedly called for the rate of VAT to be reduced. VAT was introduced here in January, 2007 and has formed a large portion of the government’s revenue.
The mid-year financial report which was recently tabled in the National Assembly said that as of June, value-added and excise tax collections amounted to $23.2 billion, an increase of 9.1% over the corresponding period last year.
According to Jagdeo, the increase in VAT collection is due to a broadening of the base and greater efficiency in the collection process. He said that this was a sign of growth in the country’s economy.
A few years ago, the government had used some of the revenue obtained from VAT to pay water rates for pensioners, a practice which Jagdeo noted on Friday still happens. He said though that the government is unlikely to take on similar initiatives because once it is started it would have to continue. He said his admi-nistration has been spending a lot more on social services than it did in the past and will be faced with more expenditure in the future.
