Jordan defends environmental tax for beverage importers, local manufacturers amidst Opposition criticism

Last Updated on Thursday, 5 January 2017, 18:08 by Derwayne Wills

The National Assembly today approved an amendment to the Customs (Amendment) Act which applies a $10 environmental levy payable by importers and local manufacturers of non-returnable units of metal, plastic or glass container of any alcoholic or non-alcoholic beverage or water.

The amendment is part of a regime of measures which will bring the provisions of Budget 2017 into full effect. These measures come in face of a 2015 ruling by the Caribbean Court of Justice (CCJ) which required Guyana return monies paid on an environmental tax by surinamese beverage, Rudisa.

Guyana had paid the company $1.2Billion in its settlement. Guyana had first brought an amendment to the Customs Act in 2015 as part of a recommendation from the CCJ which deemed the tax provision as discriminatory against the company. After the ruling, other beverage companies brought similar actions against Guyana.

“When we protect the environment, we are protecting our future and ourselves,” Finance Minister Jordan told the National Assembly, adding that the bill gives further strength to the David Granger administration’s green agenda.

“We are proposing responsible behaviour to protect our environment,” Jordan added, noting neither “importer nor manufacturers will have added cost. Once they bring back the bottles, they get their $10.”

Opposition MP Anil Nandlall was having none of it saying the bill imposes a 10$ tax on water, which was never a tax imposed on water before in the previous legislation.

“Not only are we going to pay VAT on water, we are going to pay tax on the container which the water is contained,” Nandlall said taking a jab at the government’s proposed 14% VAT on household water consumptions above $1500.

Nandlall believes a parent who is desirous of collecting the $10 refund would see themselves expending more than $10 in pursuit of it.

Nandlall challenged the move by government to tax containers already in the country since the amendment proposes the levy be paid on goods either in warehouse or removed from warehouse.

“Businesses that have containers brought into country long before the law takes effect will now be subject to the tax,” Nandlall said adding this is being done “unsuspectingly and without any consultation whatsoever” with local importers who will be affected.

Nandlall’s colleague in the House, Juan Edghill, called for Finance Minister Jordan to indicate who was consulted before the levy was decided on, where those consultations were held, and whether the measure “was not to impose hardship on people of Guyana.”

Edghill called for the amendment to be deferred. This was not successful as government, which controls a majority in the House, voted in favour of the amendment as it was presented.