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Scrap VAT on fast food restaurants- Banks DIH boss

Last Updated on Sunday, 25 January 2015, 23:21 by GxMedia

Chairman and Managing Director of Banks DIH, Clifford Reis (at lectern) addressing his company’s Annual General Meeting.

Banks DIH, Guyana’s oldest large-scale manufacturer, wants government to scrap the 16 percent Value Added Tax (VAT) on fast food restaurants from this year because of increased competition by food vendors.

“The time is now, my fellow shareholders, to remove the VAT tax on registered fast food restaurants because it is somewhat difficult to compete with the food vendors in the street,” Chairman and Managing Director, Clifford Reis told shareholders at the 59th Annual General Meeting of the company at Thirst Park.

He observed that Demico House has endured the vendors and other threats to the business outside of the Stabroek Market area. Figures show that Demico House sales were GUY$2.114 billion compared to GUY$2.162 billion in 2013. “We must remember, my fellow shareholders, that the fast food business is for the working class,” he said.

Reis highlighted that in contrast to minimum wage earners in the United States, their Guyanese counterparts have to work much harder to buy a basic meal. He said that in the United States, the minimum wage is US$8 but a hamburger , French fries and a Coca Cola costs US$6.00- less than one hour’s day’s pay. However,  in Guyana, the minimum wage is GUY$300 per hour but two pieces of chicken, one French fries and one Coca Cola costs GUY$850. “Therefore you have to work  two to three hours to buy that one meal,” he said.

Noting that “something is wrong in our country,” he pointed out that raw chicken in Guyana is VAT-free but taxed if friend. “The system does not make sense,” he said.

In addition to the removal of VAT from fast-food restaurants, he called on government to ensure that there is a level playing field on the levying of excise taxes on alcohol beverages. These two tax adjustments, he asked, should be made in the 2015 National Budget.  “What we want, fellow shareholders, is action now, not tomorrow, not next week, not next month but now in this year’s budget presentation,” he said. Guyana’s Budget is expected to be presented around late May or June, 2015 due to the parliamentary suspension and subsequent elections scheduled for May 11.

He said that with Banks DIH paying GUY$14.5 million per day or four percent of the total taxes of GUY$132 billion in 2014, there is dire need for a level playing field in determining the excise tax. “Our company, Banks DIH Limited, seems to be the cash cow of the private sector. The time is now to level the playing field for the excise tax calculation on alcoholic beverages in accordance with the Excise Tax Act,” he said. Reis also reiterated the need to go after those involved in the illegal trade of alcoholic products. ““The time is now to go after the smugglers and illegal importers of alcoholic beverages,” he said.

Banks DIH last year began major refurbishment of its restaurants, hotel and laundry as well as transformed a section of the Main Street Quik Serv to include what Reis termed a “contemporary American-style ice cream experience,” named Crème Select.