Street protests and VAT
Editorial
Kaieteur News
January 19, 2007
In the wake of the1997 and 2001 General and Regional polls there were protests and street demonstrations. People assembled at Square of the Revolution, then with the support of their political leaders, marched through the streets.
Initially, these marches always took the protesters through the major shopping centres and disrupted business. Pretty soon, all one had to do was to shout that the protesters were coming and the business places would hurriedly close their doors and send the staff home.
They adopted this course of action after a number of people were beaten in the streets, among them were people who worked in the business centres. It took appeals by the Georgetown Chamber and other business people who had the ears of the protesters to get the marches away from the business centres.
During the periods of those protests business declined. People scarcely shopped and the businesses lost money because those who had bills to pay and loans to repay simply did not make money to honour those commitments. Things were bad.
The year 2001 was considered the worst because that year the then opposition leader, Desmond Hoyte, told the people to band their waist, that there would be no Christmas that year. The people heeded his call.
Traditionally, businesses in Guyana garner some 50 per cent of their profits from sales at Christmastime. It was therefore not difficult to appreciate their dilemma that year. Many were fortunate to be in a position to dispose of their stock the following year.
The protesters are back again this year and the reason for their presence on the streets has nothing to do with elections results although some measure of politics is involved. They are marching against the imposition of the Value Added tax (VAT).
This tax was implemented on January 1, 2007 after months of meetings and seminars by the Guyana Revenue Authority. When the legislation was piloted in the national Assembly the government explained that it was intended to increase the tax base and eventually ease the burden on the public servants and ordinary people who bore the brunt of the pay as you earn system. People who usually cheated on their taxes and those who escaped paying any tax at all were to be brought under control.
The government also said that since the tax represented a removal from high consumption taxes in certain areas—on the whole, the consumption tax of 30 per cent would have been replaced by VAT of 16 per cent—and therefore a lowering of prices to the average consumer.
However, in reality, this has not been the case. The businesses have simply hiked their prices, often announcing to the consumer that the higher price was due to VAT. Some simply added 16 per cent to their existing prices while others pushed up the price to unreasonable levels.
Attempts by the GRA to effect control and to ensure that VAT serve the purpose it should have so far met with stiff resistance to the point that the GRA has backed away from its hard-line position of dealing with all those who immediately breach the law and end up fleecing the consumer.
So it is back to the protests. To its credit, the government and the GRA had promised to publish the names of those who breach the rules and operate outside the spirit of VAT legislation. This is still to happen and one is left to wonder whether this would ever be the case.
So the protesters have opted to take to the streets and undoubtedly their frustration would be target at the very people who deserve it. They, the protesters, know who are seeking to fleece them and they know that they should not allow this to continue. There must be VAT but the consumer must see a reduction in areas where there should be a reduction.
It is unfortunate that street protests, once considered a thing of the past, should be reintroduced. We expect that the major target of the protesters would be the politician who introduced this new tax but if one looks at the thing objectively then one would recognize that the culprits are the businessmen.
Perhaps the fact that the people have come back onto the streets would bear fruit because the business community should be their main target and the business people know from experience that street protests are not good for business.