Favours
As noted before, the service sector is a significant part of the Guyana economy and construction occupies a prominent portion of that sector. The growth trend in construction appears to be accompanied by a relatively slow movement in prices. It is not clear what contributes to this phenomenon, but there are obvious events that indicate that construction receives special attention from the administration in exchange for favours. Guyanese may recall that some hotel construction in Guyana obtained special funding arrangements from the administration with the hotel management being given the option to repay part of the loan with room nights, which it did. No one has ever given a clear indication of when the option was exercised by the administration or a proper accounting of the results of the option. Additionally, the myriad of infrastructural activities involving sea defence, drainage and irrigation, road and bridge construction and maintenance as well as property development enables contractors to benefit from a favourable application of the value-added tax (VAT).
Escape
The favours for the construction industry did not stop there for contractors. According to the Guyana Revenue Authority (GRA), anyone bringing in a large piece of capital equipment for the first time escapes the VAT with the prospect of repeating the feat on subsequent imports with the blessing of the Minister of Finance. The reach of the concession extends as well to
