Govt. restores 40 percent import tariff on soaps

– Harmon says move unconscionable

May 28, 2021 News, Source - https://www.kaieteurnewsonline...ort-tariff-on-soaps/

Kaieteur News – The Guyana Revenue (GRA) has advertised its decision to restore the 40 percent Common Eternal Tariff (CET) on soaps. According to the tax body, all licenced custom brokers and importers should be notified that the tariff would be in effect as of June 1, 2021 and apply to all soaps including medicated soaps, liquid and hand soaps.

The GRA stated in the advertisement that the decision is in keeping with the Government of Guyana’s obligations under the Revised Treaty of Chaguaramas and determination made at CARICOM’s 49th Council for Trade and Economic Development (COTED) meeting.

The reinstatement of 40 percent CET on soaps comes about a year after it was suspended to accommodate the importation of the commodity in wake of the COVID-19 pandemic. Citing the statement from GRA, Opposition Leader, Joseph Harmon, issued a statement calling the re-imposition of 40% tax on soap by the Government as ‘unconscionable.’

Harmon noted that it was the APNU+AFC Coalition, which removed the CET on soaps after the pandemic hit last year. He explained that the suspension was intended to increase the availability of soaps and reduce the prices to make it more affordable to ordinary people.

“We remain in the throes of a global pandemic and a central feature of the measures to prevent the spread of COVID-19 is for persons to regularly and thoroughly wash their hands with soap. The citizenry it more dependent on soap now than ever before,” Harmon outlined in the statement. He noted that the re-imposition of the tariff would imperil the health of the people as many will not be able to afford to buy soap.

Harmon noted that the 40% price increase is in addition to skyrocketing price increases for basic food items – rice, sugar, flour, oil, milk, meats and vegetables. He asserted that the PPP Government does not care about the health and safety of Guyanese, nor do they care about taking every action to help curb the spread of COVID-19.

“In fact, their actions and policies are helping to spread COVID which is already out of control. We call for both an explanation for this rash re-imposition and the immediate suspension of this 40% hardship tax which is not necessary nor is it humane at this time as we continue to battle the COVID-19 pandemic,” Harmon added.

While there has been no official explanation of the re-imposition of the CET, Kaieteur News has leant that the tariff was restored because Dominica, the Region’s largest producer of soap made representation at COTED for a return of the CET. A source close to the issue noted that “the reinstatement of the tariff will have a negligible increase in price of extra-regional soap but it will help Dominica workers keep their jobs.”

Further, the source explained that despite the rate being suspended from last year, it never resulted in a likewise reduction in the cost of extra-regional soap sold on the Guyanese market.

“Rather the importers made super profits from the reduction in tariffs,” the source added.

Opposition Leader, Joseph Harmon.

Reinstatement of 40 percent tariff on soaps in keeping with a regional ruling on trade – Govt

– Govt. Opposition criticism misleading

May 30, 2021 News, Source - Kaieteur News Online - https://www.kaieteurnewsonline...nal-ruling-on-trade/

Opposition Leader, Joseph Harmon.

Kaieteur News – In response to criticisms from the Opposition over the reinstatement of 40 percent Common External Tariff (CET) on all soaps, the Ministry of Finance (MoF) last Wednesday issued a statement explaining that the decision to restore the tax is in keeping with a 2018 ruling of the Caribbean Community’s (CARICOM) Council for Trade and Economic Development (COTED) on the matter.

Further, the Ministry called the Opposition’s criticism misleading given that it is well aware of the issue as the decision was taken while the Opposition was still in government.

Senior Minister within the Office of the President with responsibility for Finance, Ashni Singh.

On Wednesday, the Guyana Revenue Authority (GRA) published a notice outlining the move to reintroduce 40 percent CET on all extra-regional soaps. The announcement sparked criticism from the A Partnership for National Unity +Alliance For Change (APNU+AFC) coalition with Opposition Leader, Joseph Harmon, calling the Government’s decision unconscionable and unfair to Guyanese who are faced with economic hardships due to the pandemic.

Taking into account the statement of the APNU+AFC, the Government through the MoF pointed to the long history behind the re-imposition of the CET. According to the MoF release, “the APNU+AFC is well aware of the history of this matter and they had themselves already started to take action to reinstate the CET before they got busy trying to steal the 2020 election.”

“Despite being in full possession of the facts surrounding this matter, they have chosen once again to follow the route of trying to mislead their rapidly dwindling number of supporters with a completely contrived and fanciful misrepresentation of this matter,” the Ministry said.

In explaining the issue, the Ministry noted that Dominica – a CARICOM Member State and the largest producer of soaps in the Region, had filed an official complaint at COTED against a number of other member States which were applying rates of duty on extra-regional soap less than the prescribed CET rate of 40 percent. Guyana was amongst those countries, given that we were charging at the time a rate of 20 percent.

The Ministry said that as a result COTED ruled on the matter and directed that all such member States, which were in violation of the CET, should reinstate the 40 percent.

Following the 2018 ruling by COTED, the Finance Ministry said the then APNU+AFC Government started to take steps to implement the reinstatement of the CET, including drafting the required legal instruments.

“However,” the MoF said, “they did not proceed to finalise these, presumably because they were more preoccupied with trying to find a way to hold on to office illegally and preparing plans to rig the upcoming 2020 election.”

Additionally, shortly after the onset of COVID-19, the Ministry noted that the APNU+AFC Administration proceeded to lower the rate of duty charged by Guyana from 20 to 0 percent, which further exacerbated the CET violation.

“Furthermore, they did so without invoking emergency procedures through the appropriate COTED channels, which might have been used to regularise the matter. Instead, they acted with similar arbitrariness and highhandedness which characterised their entire five years of misrule,” the statement outlined.

Since then, the release added, Dominica has continued to pursue the matter bilaterally and has suffered severe economic consequences as a result of the CET violation. Further, it said that Dominica and Guyana share an important trading relationship. The release explained that Guyana is one of Dominica’s main export markets for soaps, accounting for approximately 42 percent of Dominica’s exports while Dominica sources 75 percent of its total rice imports and 32 percent of its total imports of sugar from Guyana.

As such, the Ministry said that Guyana’s failure to respect COTED’s 2018 ruling on this matter exposed the country to legal action by Dominica and other regional producers of soap through the Caribbean Court of Justice (CCJ) and could result in very substantial damages being awarded against Guyana which would in turn result in a significant cost to the public treasury.

The Ministry emphasised therefore, that the action taken is consistent with the current Government’s respect for the rule of law, the CET being a legally binding regional obligation.

“This action is also consistent with Guyana’s solidarity with our brothers and sisters in Dominica for whom soap manufacturing is a major industry, a major employer and a major source of foreign exchange. In exactly the same manner, Guyana would not wish for any other CARICOM Member State to violate the CET as it relates to any of the goods we produce and can export to the region,” the statement added.