VAT dominates Georgetown Chamber awards dinner
Stabroek News
December 20, 2006
Value Added Tax (VAT) continues to dominate conversations at business gatherings and Monday's Georgetown Chamber of Commerce and Industry (GCCI) Awards Dinner was no different.
It was not clear why President Bharrat Jagdeo who was expected to give the feature address was unable to do so, but Agriculture Minister Robert Persaud filled in and called on the business community to embrace agro-business, while giving his take on VAT.
GCCI President Capt. Gerry Gouveia, after proclaiming the benefits of VAT, spoke of what he called a threat. "If smuggling is left unchecked it could undermine …VAT," he said and called for increased security at porous borders.
The GCCI president noted that persons selling smuggled goods would be able to do so cheaper than goods subject to VAT and this would have a profound effect on legitimate businesses. Gouveia said customs, the border patrols and the police all have to be involved, to ensure that smuggled goods do not adversely impact the VAT system. He was also very optimistic that the police would be able to combat smuggling.
Nevertheless, Gouveia noted that market forces would drive prices where they should be once VAT takes hold on January 1, adding that unscrupulous businesses may want to take advantage of the system. Another concern was the government's relief for stock on hand at the end of this month, in the light of VAT. The government has said businesses which registered for VAT before December 15 would be eligible for stock relief at the standard VAT rate of 16% or on the Consumption Tax paid (whichever is lower) on goods that will be sold by March 2007. Gouveia explained that some businesses might have stock on hand for longer than three months, some for as long as six months.
Apart from his VAT concerns Gouveia proclaimed that "in my mind Guyana is on the move," with low inflation; a stable exchange rate (the US dollar is currently selling at 205) and the restoration of public confidence by the police force.
Job creation was also addressed and the GCCI president called on businesses to create more jobs and better paying ones to stem the brain drain. They were also encouraged to be mindful of the legacy of Guyana being part-host of the Cricket World Cup 2007. Gouveia said this was an important legacy and that businesses should give their support to the games.
The Guyana Office for Investment was proclaimed as an exemplary public institution and one which all other public institutions should follow and Acting Police Commissioner Henry Greene was congratulated for his crime fighting efforts.
Persaud reiterated that the government continues to respond to VAT concerns. However, he also emphasized that the government continues to recognize that VAT is not a punitive tax and it is a system of taxation to ensure transparency. For example, some of the current problems that the tax is expected to tackle include under invoicing upon importation. The minister noted that with the single VAT rate of 16% there will be a level playing field and reduced possibility of corruption. The business community was encouraged to be responsive to VAT and once the benefits become apparent the minister believes that it will be embraced.
The minister also cited Cricket World Cup next year as an opportunity for increas-ed business and all were encouraged to come on board. "This exposure would bring gains to the business community," he said.
He, too, was of the view that all the signs point to better times ahead and mention was made about the growth in the traditional sectors (this year rice showed increased earnings) and the new and emerging sectors like services.
The increased police patrols were also cited for keeping crime in check. "Much has been attained and much has been achieved," the agriculture minister said, adding that the achievements must be built upon to ensure continued improvements in 2007.
The gathering was challenged to view the agriculture sector as a food and agro business enterprise, by the minister who felt that the banking sector still had a conservative approach to agriculture. Persaud said the banks needed to be more liberal and entrepreneurial when dealing with agricultural entrepreneurs.
For example, the minister emphasized that when a farmer goes to the bank for a loan businesses benefit. The agriculture sector was cited as the single largest contributor to the Gross Domestic Product (GDP) and has a large credit portfolio. The contributions of the agriculture sector to GDP were said to be often underestimated. For example, rum is made from molasses which is a by-product of sugar cane. The agriculture sector was said to have not reached its full potential and the diversification efforts in this sector are all attempts to boost the sector. (Nicosia Smith)
Awards
Receiving the prestigious Presidential Award was Clinton Urling of German's Restaurant. For 45 years the restaurant has provided soup and creole food for the public and over a year ago underwent an overhaul in the form of a new building in the urban area of Tiger Bay. This achievement was simply put by Urling as, "Energy and persistence conquers all things."
The first GCCI president and executive member to be appointed a government minister, Manniram Prashad, minister of Tourism, Industry and Commerce received an award for the feat. Demerara Tobacco Company Ltd and Hand-in-Hand Mutual Fire & Life Insurance Companies both received awards for long and outstanding membership since 1944. An award was given to the Hardware Depot, for its pioneering efforts in the sector and Chartered Accountants Ram and McRae, for their pioneering efforts in developing a VAT and Excise Tax hand book. Partner Christopher Ram who was very outspoken in lobbying for certain changes to the VAT Act was presented with his award by the Finance Minister Dr. Ashni Singh.
RRT Enterprises received awards for developments in the automotive services sector, New Era Business Enterprise for its developments in the education sector and for conducting business with a social responsibility. Waterchris Hotel, Restaurant and Bar also received an award for developments in the hospitality and services sector in airline and creole catering.