Guyana government warns against the illegal imposition of VAT

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GEORGETOWN, Guyana– The Senior Minister in the Office of the President with Responsibility for Finance, Dr. Ashni Singh, is warning business here that they will face the full force of the law if they continue with the illegal practice of imposing value-added tax (VAT) on various commodities including construction materials.

“It has come to my attention through various reports from members of the public that several hardware stores have since refused to comply and are still unscrupulously charging VAT on several items,” Singh said.

He noted that following the national budget passage earlier this month, several measures, including the VAT zero-rating or reduction of VAT or duty previously charged on several commodities, had been removed.

He said consequently, Order Number 6 of 2021 of the Value Added Tax Act came into effect immediately for VAT zero-rating of certain construction materials.

He said these included stone imported for construction and housing from Caribbean Community (CARICOM) countries, locally produced pre-stressed concrete piles and locally fabricated mild steel beams for building construction, and locally manufactured roofing and PVC products for building construction. Import Duty on Industrial Grade Cement was also reduced from 15 to five percent.

Additionally, the VAT zero-rate was also restored to basic food items and household necessities that were previously zero-rated up to May 2015 but switched to ‘standard-rate or ‘exempt’ over the past five years, e.g., basic wheaten flour, basic bread, oats, unflavored cracker biscuits, cooking oil, locally produced bed sheets, and pillowcases and toothbrushes.

Singh also indicated that when the emergency budget was also passed in Parliament last September, it also stipulated the VAT zero rate or VAT removal on other commodities, including the overall removal of VAT on electricity and water. Therefore, since then, VAT would have also been removed from hinterland travel and cell phones, and building and construction materials.

The Senior Finance Minister recalled that all of these measures were intended to benefit consumers and ease the expense of these previously burdensome tax measures. With their removal or reduction, the expectancy was that it would have ultimately allowed for the reduction in the cost of living of Guyanese generally.

Singh said he is therefore warning establishments that this illegality will not be tolerated. He has already instructed the relevant agency-the Guyana Revenue Authority (GRA), to ensure that countrywide checks are made to enforce compliance.

He reiterated that the businesses found flouting the laws and depriving consumers and customers of these benefits will be dealt with according to law.

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