Manufacturers deplore dearth of recommendations in budget 2000
Backs ban on export of certain wood species
By Miranda La Rose
April 8, 2000
The Guyana Manufacturers' Association (GMA) has criticised government for not considering a number of proposals it had submitted for consideration in this year's budget.
The recommendations included the second request in two years for zero rating on tooling in the furniture manufacturing sector.
Meanwhile, the GMA is lobbying for suitable financing for business firms engaged in furniture production and a ban on the export of certain species of timber.
Delivering the association's sub-sector report at a luncheon at the Hotel Tower on Wednesday, Sub-Sector Coordinator, Ramesh Dookoo, said that in spite of submissions to government in this year's budget and last year's requesting zero rating on tooling in the furniture manufacturing sector, "no attention or feedback [was] given to the GMA."
Dookoo also said that other GMA recommendations ignored in the budget were the reduction in corporation tax rate for commercial companies from 45% to 40% and for non-commercial companies from 35% to 30%; amendment of the first schedule of the Income Tax in Aid of Industry Act to allow all manufacturing companies to benefit from its provisions; a single rate (ten per cent) of consumption tax for all goods; a zero rating on spares for capital equipment as a broader based incentive for all registered manufacturers; introduction of value-added tax; and removal of the property tax or substantial reform of the Property Tax Act.
The report also looked at the agro processing sector, print and packaging sub-sector, and the construction sub-sector.
Speaking about the wood and forestry sub-sector Dookoo said that the objectives are to ensure that forestry resources are utilised in a sustainable way; focus on maximum value-added production; and to maximise employment for Guyana's youths. Other objectives are to contribute to the GDP in proportions consistent with the quantum of forestry resources; to generate foreign exchange earnings consistent with the resource base of the sub-sector among others.
In order to achieve its objectives Dookoo said that the GMA is lobbying for entrenched provisions in the new forestry act to ensure the objectives of the sub-sector are backed by legislation enforceable in the courts. The GMA recommends that certain species of timber should be banned from export to achieve the desired value-added activity at home.
He noted that the decision taken by the Guyana Forestry Commission (GFC) to restrict the export of premier furniture log species-- locust and crabwood--to maximize value-added output in Guyana augurs well for the long-term development of the wood and furniture sub-sector. Other institutional arrangements and policy measures which have been initiated include the institutional strengthening of the GFC through grant aid from the British Department For International Development (DFID) geared towards the sustainable management of Guyana's forest resources and European Commission-funded grants for in-plant consultancies for product development and marketing assistance.
Meanwhile, the GMA is also working towards establishing training programmes through regional technical institutes, the University of Guyana and apprenticeship schemes to ensure requisite skills and to gather market information to disseminate to shareholders.
Dookoo noted that after decades of neglect and lack of public sector support, "during which time Malaysia, Indonesia and Brazil made significant strides in terms of world market share and technological development," Guyana's valued-added wood sector entrepreneurs and their foreign counterparts have been upgrading their technology and skills training significantly.
The foreign-owned Barama Company Ltd (BCL), he said, plans to invest US$32 million in a modern saw-milling and veneer plant and local manufacturers Precision Woodworking Limited, Shiva Woodworking and Guyana Furniture Manufacturing have invested over US$10 million in kilns and modern equipment over the past three years.