Businesses that continue to charge their customers Value Added Tax (VAT) on items for which the VAT has been removed or has been reduced will face the full brunt of the law says Senior Minister in the Office of the President with Responsibility for Finance Dr Ashni Singh.
The Ministry of Finance in a release yesterday reported that Dr Singh wished to send “a stern warning” to those businesses that continue to flout the law and “unscrupulously” charge VAT when they should not. Dr Singh stated that those engaging in this illegal practice will face the full force of the law as they are denying consumers the right to benefit from reduced prices on various commodities including construction materials.
“It has come to my attention through various reports from members of the public that a number of hardware stores have since refused to comply and are still unscrupulously charging VAT on several items,” the Minister noted.
Dr Singh warned that such illegality will not be tolerated and pointed out that he has already instructed the relevant agency – the Guyana Revenue Authority (GRA) – to ensure that countrywide checks are made to enforce compliance.
The Minister reminded that when the last 2021 Budget was passed in the National Assembly on March 4, it had outlined a number of measures including the VAT zero-rating or reduction of VAT or duty previously charged on a number of commodities. According to the release, Order Number 6 of 2021 of the Value Added Tax Act Cap.81:05 of the Laws of Guyana came into effect immediately for VAT zero-rating of selected construction materials namely stone imported for construction and housing from Caribbean Community (CARICOM) countries, locally produced pre-stressed concrete piles and locally fabricated mild steel beams for building construction, and locally manufactured roofing and PVC products for building construction. Import duty on industrial grade cement, it stated, was also reduced from 15 per cent to 5 per cent.
In addition, the VAT zero-rate was also restored to basic food items and household necessities that were previously zero-rated up to May 2015 but changed to ‘standard-rate’ or ‘exempt’ over the past five years. These items include basic wheaten flour, basic breads, oats, unflavoured crackers, cooking oil, locally produced bed sheets and pillowcases, and toothbrushes.
Prior to this, an emergency budget was also passed in Parliament on September 25, 2020. This budget also stipulated the VAT zero rate or removal of VAT on other commodities including the overall removal of VAT on electricity and water. VAT has also been removed from hinterland travel and cell phones,
The Finance Minister emphasised that all of these measures are intended to benefit consumers and ease the “expenses aligned to these previously burdensome tax measures and with their removal or reduction,” with the expectancy that it would ultimately allow for the general reduction in the cost of living of Guyanese, the release added.
