GMSA appeals to govt to reexamine US$M payment to Surinamese beverage company

Last Updated on Sunday, 23 August 2015, 18:38 by GxMedia

The Guyana Manufacturing & Services Association (GMSA) wishes to place in the public domain our strong recommendation for a re-examination of the decision by Government to accede to the demands by the Surinamese company, RUDISA Beverages for a refund of some US$6M representing the Environmental Tax (E-Tax) paid to Guyana. 

 This demand is based on a May 2014 ruling by the Caribbean Court of Justice (CCJ) in the case brought by RUDISA. 

As the official business representative of private sector Manufacturers in Guyana, the GMSA is appealing to the Administration to re-examine the ruling by the CCJ and most of all,to apply the appropriate penalties ascribed by the Laws of Guyana for RUDISA’s admitted under-invoicing of exports to this country.  In addition, Government must take into account the gross unfairness toGuyanese who would be forced to pay twice since they already pay RUDISA’S Environmental tax with every purchase of a Thrill drink.

The GMSA’s Board of Directors and some members viewed the entire video recording of the court proceedings and we offer the following observations and recommendations:-

1.    Under cross examination by the then Attorney General of Guyana, the Chief Financial Officer of RUDISA admitted that the company has consistently under–invoiced their beverage exports to Guyana, but he claimed ignorance that this action was an infringement of Guyana’s domestic Laws.

2.    The Lawyer representing RUDISA admitted to the Court that the E-tax of G$10 per bottle was actually passed on for several years to Guyanese distributors and consumers. This is a clear violation of the administrative protocols governing the procedures for implementing the E-Tax.  One protocol stipulates that the Exporting Company (RUDISA in this case) should absorb the cost and not transmit it down the chain to consumers.

During the proceedings at the CCJ in 2013/4, Guyana was unable to provide verifiable proof that RUDISA’s E-Tax was indeed passed on to Guyanese retailers and ultimately our consumers.  This unfortunately influenced the Court’s negative ruling.  The end result is an agreement reached between RUDISA and the new Government of Guyana for a penalty payment which is only slightly lower than the costs recommended by the Caribbean Court.

The GMSA is of the firm view that the two (2) infractions mentioned above – the Under-Invoicing of exports and the onward transmission of the E-Tax to Guyanese Retailers/Consumers, merit a serious review by the Guyana Revenue Authority (GRA).  Most importantly, Government must demand that RUDISA pays the required fines and penalties as stipulated in the Laws of Guyana.

It is highly probable that RUDISA may very well end up owing the people of Guyana after these penalties are factored in.  

We ask the authorities to consider the full implications of the CCJ’s ruling against Guyana.  No one could ignore the fact that the beverage industry is a very competitive one in the domestic market.  Guyana boasts of several large scale beverage manufacturers who market in direct competition with every imported beverage.  These local companies were also caught in the E-tax net which placed an even greater strain on their operation costs and revenue sales.   They do not pass on the E-tax to consumers!

The GMSA appeals for fairness and equity at least in our own country.  Our exporting manufacturers already come up against a slew of illegal non-tariff barriers in receiving countries in and outside of the Caribbean region.  We can only expect fairness and support at home.  

Very similar circumstances had wiped out the manufacturing sector in a certain Caribbean country and the GMSA absolutely does not wish for this to happen in Guyana.