May 10, 2017 Source

The Private Sector Com-mission (PSC) on Thurs-day raised with the government, concerns about some foreign-owned companies not charging the Value-Added Tax (VAT).

This has been a longstanding concern of some businessmen and was raised by the PSC in wide-ranging dialogue with Finance Minister Winston Jordan and others in what was seen as a key step forward in relations between the two sides which have been frosty for a number of months.

Jordan met with a PSC delegation led by its Chair-man Eddie Boyer, in accord with an agreement to meet with the PSC on a quarterly basis.

According to a joint press release on Monday from the ministry and the commission, the PSC applauded the government’s handling of the apparent challenge to accessing foreign exchange and its resulting amelioration and complimented the minister on the injection of US$30 million into the housing sector. The PSC also commended the recently implemented ’Trusted Trader’ system through which legitimate and compliant businesses are spared the burden of lengthy processing times for transactions.

The joint media bulletin also noted the matters of concern raised by the PSC delegation which included VAT on tuition, the rehabilitation of hinterland airstrips, the 2% withholding tax, the tributors’ tax on the mining sector, VAT on the tourism sector, and the paddy bug infestation on rice.  Other matters discussed were the current system employed by the Guyana Stock Exchange to value the shares of publicly traded companies, the urgent need for Anti-Dumping, and Mergers and Acquisitions legislation, the introduction of a Single Window System and the need for US Transportation Security Administration- compliant scanners at the airports to allow non-traditional cargo exports on passenger aircraft.

The joint statement said that the minister in his response to some of the concerns raised, reminded the PSC that all taxes will be reviewed for Budget 2018 and suggested the establishment of a working group to examine taxes and concession packages for the tourism and aviation sectors.  Jordan called for a “dose of reality to be had by all sides -government, workers, private sector and unions” as Guyana navigates its way through the diversification of its economy.

According to the joint release, Jordan warned that the “adjustment pains” now facing the country will continue if it loses the opportunity to create strategies to ensure viability of the sectors. The minister also pointed to challenges facing the rice, sugar and forestry sectors, and reminded the PSC that producers had been warned more than three decades ago that preferential sugar arrangements would come to an end but they had failed to reorganize and diversify the industry.

The PSC Chairman said the commission was committed to collaborating with the government to arrest the sliding economy, the joint media bulletin said. Boyer noted the previous collaboration facilitated under the National Competitiveness Strategy and urged the restoration of an institutionalized means of consultation and decision making between the government and the PSC. He further expressed the determination of the PSC to work with any government in office and added the Commission was heartened by a letter from Minister of State, Joseph Harmon commending the crafting of a formal structure within which the government and the private sector could engage.

The PSC Chairman also alluded to the foreign exchange situation, the joint release said, whilst referring to a meeting between the PSC and the Governor of the Bank of Guyana, where the PSC was informed that much needed foreign exchange was been traded by some businesses to other countries. Jordan assured the meeting that the ministry was examining ways to strengthen the Bank including introducing legislation and expanding the board. The minister extended an invitation of a place on the board for the PSC, once the legislation was in place.

According to the joint statement, the commission also expressed its concerns about foreign-owned businesses not charging VAT, although they were required to do so. The Commissioner General of the Guyana Revenue Authority (GRA) who was present, informed the meeting that the GRA had already written to some embassies with a view to discussing the laws of Guyana as it relates to their nationals’ tax obligations, the bulletin added.

Further announcements from the GRA head, the joint bulletin stated, included the implementation of the Single Window System by June 2018, with the test phase starting in September of this year, and the beginning of operations by the GRA in Mora-whanna in the northwest on June 1, 2017.

Jordan also took the opportunity to suggest to the PSC to explore partnerships with regional and international bodies to take advantage of imminent opportunities in the oil and gas sector rather than wait for local content legislation, the joint release said. He pointed out that the emerging sector was creating a demand in the hospitality, food and housing fields, including ancillary services.

The minister expressed his appreciation that the PSC had taken up President Granger’s call to execute a Business Summit, and said that the government stands ready to assist in whatever way it could, the press release said.