Manufacturers urge gov’t to revisit Rudisa payment

The local manufacturing sector yesterday appealed to government to re-examine the $1.2 billion settlement over an environmental tax imposed by Guyana on Surinamese company RUDISA International saying that the firm may owe more in taxes after its representatives admitted to under–invoicing.

In a statement, the Guyana Manufacturing & Services Association (GMSA) strongly recommended government to re-examine its decision to accede to the demands by RUDISA for a refund of the US$6.22 million representing the Environmental Tax (E-Tax) paid to Guyana. RUDISA had taken Guyana to the Caribbean Court of Justice (CCJ) and the court awarded US$7.72M to the company but the beverage company agreed to accept US$1.5M less after its principals met with President David Granger and State Minister Joseph Harmon.

“As the official business representative of private sector manufacturers in Guyana, the GMSA is appealing to the Administra-tion to re-examine the ruling by the CCJ and most of all, to apply the appropriate penalties ascribed by the Laws of Guyana for RUDISA’s admitted under-invoicing of exports to this country. In addition, Government must take into account the gross unfairness to Guyanese who would be forced to pay twice since they already pay RUDISA’S Environmental tax with every purchase of a Thrill drink,” the GMSA said yesterday.

The statement said that the GMSA’s Board of Directors and some members viewed the entire video recording of the court proceedings and pointed out that under cross-examination by the then Attorney General of Guyana, the Chief Financial Officer of RUDISA admitted that the company has consistently under–invoiced their beverage exports to Guyana, but claimed ignorance that this action was an infringement of Guyana’s domestic Laws.

“The lawyer representing RUDISA admitted to the Court that the E-tax of G$10 per bottle was actually passed on for several years to Guyanese distributors and consumers. This is a clear violation of the administrative protocols governing the procedures for implementing the E-Tax. One protocol stipulates that the Exporting Company (RUDISA in this case) should absorb the cost and not transmit it down the chain to consumers,” the manufacturers’ body pointed out.

The statement said that during the proceedings at the CCJ in 2013/4, Guyana was unable to provide verifiable proof that RUDISA’s E-Tax was indeed passed on to Guyanese retailers and ultimately the consumers. “This unfortunately influenced the Court’s negative ruling. The end result is an agreement reached between RUDISA and the new Government of Guyana for a penalty payment which is only slightly lower than the costs recommended by the Caribbean Court,” the GMSA said.

It asserted that it is of the firm view that the two infractions mentioned – the under-invoicing of exports and the onward transmission of the E-Tax to Guyanese retailers/consumers – merit a serious review by the Guyana Revenue Authority (GRA).

Most importantly, Govern-ment must demand that RUDISA pays the required fines and penalties as stipulated in the Laws of Guyana, the GMSA declared. “It is highly probable that RUDISA may very well end up owing the people of Guyana after these penalties are factored in,” it asserted.

The manufacturers’ body appealed to the authorities to consider the full implications of the CCJ’s ruling against Guyana.

“No one could ignore the fact that the beverage industry is a very competitive one in the domestic market. Guyana boasts of several large scale beverage manufacturers who market in direct competition with every imported beverage. These local companies were also caught in the E-tax net which placed an even greater strain on their operation costs and revenue sales. They do not pass on the E-tax to consumers,” the GMSA asserted.

The body appealed for fairness and equity “at least in our own country.” The statement said that local exporting manufacturers already come up against a slew of illegal non-tariff barriers in receiving countries in and outside of the Caribbean region. “We can only expect fairness and support at home,” the body said.

“Very similar circumstances had wiped out the manufacturing sector in a certain Caribbean country and the GMSA absolutely does not wish for this to happen in Guyana,” it declared.