Environmental Tax still haunts Gov’t; more billion dollar lawsuits filed

Last Updated on Thursday, 21 April 2016, 18:21 by Denis Chabrol

The controversial Environmental Tax which saw the Government of Guyana having to pay millions of dollar to a beverage company is still haunting the Government as two other importers look to cash in with similar lawsuits.

Minister of Legal Affairs Basil Williams at a press conference on Thursday said that two other companies – S.M Jaleel and Guyana Beverages Inc have filed lawsuits similar to the one filed by Rudisa Beverages a few years ago.

Rudisa Beverages had taken the government to court over the imposition of GYD$10 on every disposable container imported into the country and won the case, arguing that a similar tax was not imposed on local distributors such as Banks DIH and Demerara Distillers limited.

In the Rudisa case, the Caribbean Court of Justice ruled that the Guyana Government breached the regulations of the Treaty of Chaguramas. This led to a US$6M ruling in favour of the applicant.

Williams pointed out that the two companies have sought “special leave to appear as parties before the CCJ for the purpose of filing an originating application claiming relief and reimbursement against Guyana.”

The companies are claiming funds from January 1, 2006 to the date the controversial tax was repealed August 2015.

This means that the rulings in favour of the companies could reach into billions of dollars.

After Rudisa had won its case, the Guyana Manufacturing Services Association (GMSA) had sternly criticized for not fighting the case in a proper manner.

GMSA had said that government should take into account the gross unfairness to Guyanese who would be forced to pay twice since they already pay RUDISA’S Environmental tax with every purchase of a bottled beverage.

“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” a statement had noted.