Businessmen cry for fuel tax relief
Stabroek News
May 21, 2004
The business community is urging the government to lower the 50 per cent consumption tax on fuel as prices continue to rise.
Gasoline prices jumped from $545 to $618 per gallon at the Guyoil gas stations and over $620 per gallon at other gas stations.
Brian James, owner of Auto Supplies Co., says he would like to see the consumption tax decrease since it impacts directly on the cost of living.
But by what amount will the government reduce the tax, if they do, remains to be seen, says James.
Not only will transportation fares increase, says James, but also electricity rates, import rates and airline tickets if fuel prices continue to rise.
Chris Fernandes, the managing director of John Fernandes Ltd., says he would welcome a reduction and is disappointed that this was not done.
Fernandes argues that the government should adjust the consumption tax, so that incoming revenues will be equal to the revenues already budgeted for. Now that the price of fuel has increased, the government's share from the consumption tax also increases.
Roy Shiztahal, managing director of Chin's Manufac-turing Industries Ltd., told Stabroek Business that as a result of these fuel increases his cost of production has increased by 25%.
Shiztahal explained that the company is not even breaking even because of the significant increase in production.
In response to Nadir's call to conserve on fuel consumption, Shiztahal says this is not possible where his company is concerned.
He says the company is already using a minimum amount of fuel and cannot use any less.
Chin's distributes its goods countrywide by vans and uses fuel to generate eight hours of electric power daily.
He says increasing the prices for their products is not an option because of the competitiveness of the market.
"Something has to be done or else we will be forced out of business," he says.
Joseph Singh, permanent secretary of the Ministry of Tourism, Industry and Commerce met with members of the Guyana Public Transportation Association and the Guyana Minibus Association to discuss the fuel issue.
Singh noted that it was proposed at the meeting that cheaper fuel be imported from Brazil, but this option is not feasible.
No new fares were proposed, he says, but it was requested that the consumption tax be lowered.
Singh says the ministry will continue to monitor fuel prices to determine its effect on inflation.
He says every country needs a certain level of inflation to grow but they are monitoring the situation to determine whether or not fuel prices will force inflation over the optimum level, which will affect growth negatively.
But Steve Chung, president of the Guyana Petrol Station Dealers' Association (GPSDA), feels that the government is trying to fool the nation, noting that the higher the price for fuel on the market the more revenue the government will gain.
GPSDA said a fortnight ago the CIF price rose to US$52 per barrel, which earned the government $160 per gallon and with the new prices, the government would be getting $175 per gallon in consumption tax.
When contacted on this issue Peter deGroot, chairman of the Private Sector Commis-sion had no immediate comments, however, he noted that a meeting was scheduled yesterday to discuss the matter with members of the private sector.