VAT not likely until 2006
Stabroek News
May 28, 2004
The replacement of the consumption-tax regime with a value-added tax (VAT) is not expected to take place until April 2006, after the next general elections.
This is according to the completion point document for Guyana to have achieved additional debt relief issued last December. VAT is calculated as a percentage of the purchase price, payable on the purchase of goods and services.
The IMF had recommended the implementation of the VAT well before this time as well as a comprehensive overhaul of the tax system. The government had moved on some of these recommendations including presumptive taxation but these have been caught in legal delays.
Sources have indicated that without the widening of the tax net by extending consumption taxes to services provided by hotels and professionals, raising the annual licence fee on professional businesses, limiting tax holidays and imposing presumptive taxes on the self employed, the government would be unable to match these with increasing the non-taxable income threshold as has also been recommended by the IMF.
The imposition of the VAT would allow for a more equitable tax system as it would be borne by all consumers. The challenge here again would be the administration of the system.