New zero-rate list out -- takes effect Monday
By Neil Marks
Guyana Chronicle
January 27, 2007
A NEW set of items zero-rated for Valued Added Tax (VAT), including all meats, cooking oil, black-eyed peas, soap powder, essential items in agriculture, and internal air, river and land transport comes into effect Monday, Minister of Finance Dr. Ashni Singh announced last evening.
Singh said the list of the 40 items now being zero-rated for VAT was decided upon after “a process of reflection” based on feedback from consumers, and he noted that the government will continue to review the schedule of items that attract VAT to adjust these as fit. (See page seven for the full list of zero-rated items, including the 40 new items.)
For the items to be zero rated in the Information Technology and transport sectors, agreements would have to be signed with the various providers, the minister said.
Internet services have been zero rated, along with ink cartridges which were left out of the list of computer related items previously zero-rated.
The decision to zero-rate VAT on internal transport, particularly by air for the transporting of passengers and goods to interior communities, was evidently taken because of the additional burden of the tax on an already expensive system.
In the fisheries sector, ice, fishing nets, twine and rope, among other items, have been zero rated.
In agriculture, the items now also zero-rated include vegetable seeds, harrows, cultivators, ploughs, weeders and hoes.
Human remains (corpses) and funeral services have also been zero-rated.
Singh said the government has maintained that it will continue to monitor the impact VAT will have on businesses and consumers and be willing to consider and implement adjustments where these were found to be appropriate in order to ensure consumers are not adversely affected.
He said the amendment to the VAT legislation passed Monday in the National Assembly, which gives the minister powers to make orders to adjust the zero-rated and exempt schedules, simplifies and makes more efficient the process through which the government can respond to the feedback from its consultations and monitoring.
Singh said the registration of companies, which now numbers more than 2,000, is a resounding success and runs contrary to those who doubted that businesses over the $10M ceiling would register.
The Minster of Finance expressed confidence too that business and consumers now have an improved understanding of the way VAT operates.
He said the Guyana Revenue Authority, the Ministry of Finance and the Ministry of Tourism, Industry and Commerce will continue to monitor market prices.
Singh admitted that there is work yet to be done in the continuing programme to educate business and consumers about how VAT works.
He said while the implementation of VAT continues to have challenges, this is not dissimilar to what happened in the host of countries which have already implemented the tax regime.