Taxation system, VAT review underway

By Michael Younge 

Head of state Donald Ramotar has announced that a complete review of the country’s taxation system and tax policies will be undertaken soon.

The president who has been in office for two weeks said that the move to review the taxation system is in keeping with the promise he made on the 2011 campaign trail and was one of the key highlights in the People’s Progressive Party/Civic (PPP/C) elections manifesto.

He explained that the government is cognisant of the concerns raised by many Guyanese about the need to either revamp or improve the country’s taxation system, and was optimistic that when the review is completed, more progress will be derived.

President Ramotar said that the review will be undertaken by a three-man panel which he has already chosen. The members of the panel are Ronald Ali; economist Dr Cyril Solomon and prominent businessman, Clifford Reis.

“I hope that they will begin their work shortly. The terms of reference have also been completed and sent to them…,” President Ramotar said. He also noted that the review would place the Value Added Tax (VAT) under the microscope.

The VAT has been a sore bone of contention among ordinary Guyanese and members of the business community. There were calls, even in the run up to the recently held regional and general elections for the tax system to be either scrapped or reduced by half, because of the alleged burden that consumers and businesses were experiencing.

The opposition continually called for an overhaul of the tax system, stating that the country’s tax regime was too harsh on businesses and Guyanese. They have consistently called for a review and appraisal of the VAT with some of them promising to reduce the tax using their parliamentary majority to about seven per cent.

Ramotar said that all of the resources which were necessary would be made available to the three-man panel that would start work this week. A series of meetings have already being scheduled, and it is expected that the men will work closely with the Guyana Revenue Authority, the Finance Ministry and the private sector, before attempting to undertake the review.

The president was confident that the three men would deliver on the mandate given to them, and said he remains committed towards creating an economy fuelled by growth and development, and a tax regime which attracts more investment to Guyana.

The president was cognisant of the need as well for a taxation system that provides enough resources to address the concerns of the poor, rather than acting as a disincentive to them.