As of January 1, 2018, all importers of timber products, who focus on the importation of Pinewood, will be required to obtain an import permit from the Guyana Forestry Commission (GFC), the Ministry of Natural Resources (MNR) says.
A notice in yesterday’s Sunday Stabroek stated that the Ministry was notifying the general public, as well as all stakeholders in the forestry sector that a decision was taken by the government that will see importers of timber products with a specific focus on Pine Lumber being required to obtain a licence, as prescribed by the Forests Act of 2009 and by the National Forest Policy.
“As a consequence of this decision, potential importers of Pine Lumber will, as of January 1, 2018, be mandated to seek and obtain an Import Permit prior to importing Pine Lumber and other Pinewood products. All relevant information pertaining to the application process will be published shortly,” the notice said.
It added that Guyana is in the final stages of a bilateral trade negotiation with the EU on the establishment of a Voluntary Partnership Agreement (VPA) under the EU Forest Law, Enforcement, Governance and Trade Initiative (EU FLEGT), which is a process that is being led by a National Technical Working Group (NTWG) comprising representatives from civil society, non-governmental organizations, private sector and the Government.
As a result, it was agreed that the decision is necessary for traceability and to ensure that there is a “consolidated legality framework” for the thorough assessment of all timber products leaving and entering the country.
The move by the government comes after the Guyana Manufacturing and Services Association and Forest Products Association of Guyana had made calls for the 14% VAT on forest products to be recalled.
The groups had explained that the importation of Pinewood was creating an unfair environment in the market, since persons were being able to import the item and sell it in the local market at a cheaper price.
An official from the GM&SA had emphasized that the 14% VAT would put the “already ailing” sector at a major disadvantage, especially when the local products are compared to the imported ones.
“We are already at a price competition level with imported products and now our products have been marked up by 14% which means you have created an upturn with the competition,” the official had said.
“There will be job losses. You will have less investment and for those who stay in business their cash flow will be significantly impacted by VAT because even if you assume that you have an efficient GRA (Guyana Revenue Authority) and they will reimburse you the VAT, it will still take several months for that to happen,” the official had explained.
When questioned on this, Minister of Natural Resources Raphael Trotman had said that the government was working on other initiatives that would “cancel out what is seen as an oppressive 14% VAT” on value-added forest products.
He had pointed out that one of them was placing a restriction on the importation of Pinewood.
“There is one such proposal, which I have on my desk right now and is a restriction on the importation of Pinewood, which is crowding out our local species. We are working together with the Ministry of Communities and the Ministry of Public Infrastructure to ensure that local loggers can have their logs and lumber added to the government’s infrastructure drive,” Trotman had said, while explaining that the government believes that the incentives and opportunities they are offering will “cancel out what is seen as an oppressive 14% VAT.”
“We want to ensure that lesser used species and local loggers have a percentage of all government contracts which will guarantee an income for them,” Trotman said, while stressing that the proposed restriction will not be a ban. “It is not a ban but a restriction because Pine[wood] can’t be imported and sold at a price cheaper than those in Guyana. What we are doing, it’s not going to be a ban,” Trotman had stressed.