The AFC never had a problem with the environmental tax
May 14, 2014, By KNews, Filed Under Features/Columnists, Peeping Tom, Source
The Alliance for Change is attempting to exculpate itself from any blame for the predicament that Guyana now finds itself in by having to pay relief to a Surinamese company to the tune of US$6M. The combined Opposition, including the AFC, has been criticized for failing to give approval for the passage of legislation that would have made the tax non-discriminatory against importers of beverages.
The AFC rests its case on the basis that what the CCJ has awarded is a refund or reimbursement of the environmental tax paid by the Surinamese company because this tax was in violation of the Revised Treaty of Chaguaramas (RTC). In other words, the AFC is saying that regardless of whether it had passed the legislation, Guyana would have been required to refund monies illegally collected. It therefore suggested that the Peeper, who had apportioned blame to both the government and the AFC, was confusing a refund with compensation.
The AFC is suggesting that the Peeper should go back and do some research. I would suggest to the AFC that it too should go back and do its research by reading the judgment, since the damages claimed by the claimants included a request for reimbursement, as well as orders for the legislation to be revoked.
The AFC wishes to contest the Peeper’s view that Guyana could have avoided such a harsh judgment, i.e. the relief awarded, had it passed the Customs amendment. The AFC is sticking to its position that the environmental tax was illegal and therefore Guyana would have had to pay the reimbursement even if the AFC had not frustrated government’s attempt during the trial to pass legislation to make the environmental tax non- discriminatory.
I respectfully recommend that the AFC should go back and read the judgment of the CCJ, because that judgment in no way suggests that because the environmental tax was unlawful it should inherently be returned to the company.
Indeed, the Government of Guyana tried to avoid the reimbursement by arguing that such a reimbursement would have constituted unjust enrichment of the claimants, since they had already passed on the tax to their customers.
If Guyana could have proven that the tax was passed on to the Guyanese customers of the claimants, it would not have had to pay the reimbursement, because this would have constituted unjust enrichment. It is therefore false for the AFC to seek to contend that Guyana would have had to reimburse the claimants, because all along the tax was illegal.
Guyana failed to prove that the tax was passed on to the claimant’s customers, because the company showed that by virtue of a special accounting arrangement, the tax was absorbed by the group in order to retain market competitiveness.
This should disabuse the AFC of the opinion that regardless of whether the Customs amendment was passed, the monies would have had to be repaid. No, it would not, and the suggestion by this column is that the relief offered would have been mitigated if Guyana had showed the Court that it had taken steps to correct the non-discriminatory nature of the legislation.
This is why this column referred to the case of Trinidad Cement Company v Guyana in which Guyana was also in flagrant violation of the Revised Treaty of Chaguaramas. The issue there was Guyana’s revoking of a tariff on extra-regional cement.
The company in that case did suffer losses as a result of Guyana’s illegal actions under the same RTC. But the CCJ did not award any monetary damages against Guyana. My point, therefore, is that if Guyana had put its house in order during the trial, it would have demonstrated good faith and mitigated the relief that was ordered by the CCJ.
No one is trying to deny that Guyana was for over twenty years collecting a discriminatory tax. No one is denying that Guyana was in the wrong. In fact throughout the trial, Guyana never contested that it was in breach of the RTC. It did try to convince the court of its good intentions by seeking to pass legislation during the trial that would have corrected the non-discriminatory nature of the legislation. But this was rebuffed by the combined Opposition.
It is respectfully submitted that the AFC never had an issue with the environmental tax. It has never argued that the tax was in breach of the RTC. Never in the history of the AFC did it call for a repeal of the environmental tax. The tax was never the issue. What then was its basis of denying the amendment that would have allowed Guyana to put its house in order?
