Last Updated on Saturday, 22 August 2015, 18:28 by GxMediaGuyana has begun reviewing a raft of taxes, even as government opted to forgo almost GUY$1 billion in revenue as a result of the zero-rating of several basic consumer items from the Value Added Tax (VAT).
Finance Minister, Winston Jordan announced at the close of the 2015 National Budget debate that the establishment of the Tax Review Committee marked the fulfillment of one of the coalition’s 100-day promises.
He was at the time addressing the undelivered VAT reduction promise in the government’s 100 plan. He said the reduction could not occur because it would not have served its intended purpose of brining relief to the poor.
He said instead, VAT was removed from over 21consumer items costing the treasury nearly GUY$700 million.
He charged that the Opposition seemed preoccupied with the fact that the VAT reduction were not had.
But he claimed that it would be “reckless and irresponsible” to pursue the VAT reduction in its current state.
In that vein, he quoted former Finance Minister Dr. Ashni Singh’s 2012 budget speech debate rebuttal on the VAT to give credit to his argument. “Anybody who objectively abandons the temptation of popular political appeal and objectively and seriously examine the VAT would soon discover that a reduction in the VAT will bring little or no benefit to the poor people of this country.” “In fact,” Jordan continued to quote, “The most vulnerable will benefit least to the cut in VAT and it is in fact the best yield that will benefit the most from a cut in VAT.”
Jordan said that the government promised a phase reduction, but a study is first needed. “We got to have a study, this is one of our major tax earning categories,” he said. “You don’t just go cutting it and hoping something happens.”
The Finance Minister said that the VAT reduction has only been delayed, urging that all wait to see what the study into the matter brings.
He noted however that the good news is that the formation of the tax review committee was convened. The Chairman is Economist, Dr. Maurice Odle. The other members are Dr. Thomas Singh, a University of Guyana lecturer, prominent accountant Christopher Ram, Godfrey Statia, former GTT Deputy CEO.
The Committee, Jordan said, has already started its work and will continue for the next four months “to produce an interim report on both the tax system and tax administration.”