Internet Radio

GRA warns businesses about VAT policy violation

The Guyana Revenue Authority (GRA) on Wednesday expressed concern that several businesses have over the last year seemingly taken the Value Added Tax (VAT) policy for granted to the disadvantage of consumers.

The revenue agency said those businesses had previously ensured that they were in compliance with the law in terms of the display of prices for their goods, commodities and services following the implementation VAT.

But now, several consumers have complained about the embarrassment and “tax shock” suffered when
they got to the cash register or payment area. The law requires that consumers be made aware
of the final price they will be paying for the item or service beforehand, whether a business
advertises its prices VAT inclusive or exclusive.

GRA is reminding businesses that Section 90 (2) and (3) of the VAT Act clearly states that
“where a registered person advertises or quotes a price for a good or service that is subject to
16% VAT, the price is required to include the tax and the advertisement or quotation must
state that VAT is included.”

Notwithstanding, VAT registrants may advertise or quote a price exclusive of the tax, provided that the price tag also states the amount of tax to be charged on the supply and the total price after the tax is added. All the information on the price tag must be given equal prominence and impact and must be done for each item. Hence, where the price of an item excludes VAT, the following must be seen on the price tag:

Price (item name e.g. Milo or dress) $100
VAT rate 16% $16
VAT inclusive $116 total to be paid

Businesses that choose to advertise VAT Inclusive will spend less time preparing price quotes and repacking shelves with items left at the cash register. They will save their customers embarrassment, reduce the mental strain on customers and improve their customers’’ shopping experience. On the other hand, customers will spend less time comparing prices and will be better able to select items to match their purchasing power. Where registered persons fail to charge the tax in the price of the good or service, the cost of the item will be considered to have included the VAT and the business person will have to account for the tax as if it was charged in the price of the item.

It is expected that businesses will immediately review their price advertising methods and
make efforts to comply with the stipulations according to the Law.

For further clarifications on this policy and any other, taxpayers can call the tax hotline on
telephone numbers 227-6060/227-8222 ext. 1201-1203.