I wonder if the Commis-sioner-General can afford us an explanation what is the Value Added Tax to be implemented in 2006.
Yours faithfully,
Krishna Nand Prasad
Editor's note:
A tax study in 2002 by the US Fiscal Affairs Department (FAD) said it would be advantageous for Guyana to introduce VAT to the retail end and the report detailed how maximum benefits could be derived from such a tax. It suggested that if the government decided to go this route, it would introduce a broad-based invoice type tax with a single positive rate and zero rate for exports.
It suggested a registration threshold of an annual turnover of $10,000 for registering taxpayers into the VAT and a presumptive tax on taxpayers with turnover below the threshold with voluntary registration permitted, subject to outlined conditions.
The consultants said government purchases must be subjected to the VAT and the tax on capital goods fully creditable. Further, they said, vehicles and entertainment expenses should be treated as final consumption and not allowed as input credit.
The recommendations include exempting all health services, educational services and financial services from VAT. The mission suggested that newly constructed residential housing be taxed, but residential rents be exempt and farmers with turnover above the threshold be given the option to register so they could be fully taxed or zero rated if they are exporters.