Legal action against VAT defaulters-- GRA
Guyana Chronicle
January 4, 2007
THE Guyana Revenue Authority (GRA) will be instituting charges against three businesses found contravening Value Added Tax (VAT) laws which went into effect January 1.
That’s the word from GRA Commissioner General, Mr. Khurshid Sattaur.
The Government Information Agency (GINA) said he made the disclosure yesterday during an emergency press conference at the GRA head offices.
GINA said inspections by GRA officials revealed several irregularities by businesses, including refusing to charge VAT, charging without having a registration certificate and charging VAT on zero rated items.
The agency said Sattaur withheld the names of the defaulting entities, stating they were a supermarket, a hardware store and a restaurant.
While several offences were recorded, the Commissioner General said “there was general improvement with compliance by a lot of the businesses.”
GINA said the GRA is also responding to reports of hostility and in some cases threats against staffers on inspections in the field.
Sattaur, it reported, said the GRA has observed the positive action by some businesses to keep consumers informed of adjustments under the VAT system.
He also said the GRA is “willing to fund the advertisement for companies who are willing to accurately inform the public.”
Sattaur stressed the need for compliance by businesses to ensure that consumers are not exploited as a result of VAT, GINA said.
The new taxation system replaces the 30 per cent consumption tax with the 16 per cent VAT.
Under the new system all basic food, educational and medical items and fuels used for cooking and transport will be zero-rated or exempt, GINA said.
Some store owners in the city reported that customers continued to be abusive yesterday on hearing of the VAT charges.
All the business entities this newspaper checked with reported poor sales.
The issue of double taxation remained a burning problem as many retailers and consumers insisted that unfair charges on items persisted, with only a few business entities calculating prices in the manner approved and recommended by the GRA.
Several retailers complained that the large enterprises, with the exception of a few, from which they buy, were still incorrectly applying VAT charges, forcing them in turn to up their prices to the dismay of customers.
A prominent businessman said while the GRA has highlighted those items which will have reduced prices, it did not give similar prominence to many items which will attract higher prices, and customers went into stores expecting that the prices of all items will decrease.
But on hearing that several important items, particularly in the hardware and agricultural tools categories, have actually been increased as a result of VAT, they reacted in a hostile manner, he said.
The businessman explained that items such as bolts, nuts, cement, steel rods, forks, shovels and plastic household utensils which previously attracted a consumption tax of 10%, now attract a 16% VAT and the prices for those will increase.
He further contended that the public relations campaign of the GRA instilled a misconception in the consumers that the prices of most commodities will decrease.
Another irritant that surfaced yesterday was the issue of school items which under the VAT law are zero rated. However, bills show that VAT charges were made on school items purchased from several stores.
One parent said he bought school shirts and the bill showed VAT charges included.
Sattaur, who headed a team Tuesday to monitor the implementation of VAT, insisted that the law provides for stock relief for goods acquired last month and prices should therefore reflect this relief as businesses will receive tax credit input for goods which previously attracted a 30% consumption tax.