Some Berbice businesses cry foul over govt's mobile shops
-Ministry says campaign successful
By Daniel Da Costa
Stabroek News
February 1, 2007
Several businesspersons in East Berbice have expressed indignation over a recent exercise conducted by the Ministry of Agriculture and the New Guyana Marketing Corporation in Regions Five and Six during which essential items were sold at "competitive prices" to two communities. According to a release from the Ministry of Agriculture, trucks were dispatched to Tain on the Corentyne and Bath Settlement on the West Coast on Sunday and Monday offering zero-rated items for sale to residents. This was as a result, it said, of complaints received from residents in these areas that the prices of zero-rated and VAT-exempt items had escalated since the introduction of the new tax system on January 1.
During a visit to the two regions last week Commissioner General of the Guyana Revenue Authority, Khurshid Sattaur accused some business persons of charging VAT on zero-rated items and described them as "unscrupulous and indisciplined", saying they will be prosecuted if they continued this practice.
Accompanying Sattaur was Minister of Agriculture Robert Persaud who has parliamentary responsibility for East Berbice. Prior to the visit there were reports that sugar workers were planning a protest over the increases. At a press conference two Mondays ago at State House hosted by the two officials, Persaud announced that government was exploring the possibility of dispatching trucks to various points in the two regions with zero-rated items. This, he said, would bring some "equilibrium" to the market and businesspersons would be forced to adjust their prices.
The sale at Tain was conducted at the University of Guyana, Berbice Campus. Some residents who bought items including cooking oil, butter, flour, sugar, garlic and split peas said some of the prices were lower than at some shops while others were higher. Many of them who live in the sugar belt said they were pleased with the initiative since they felt they were being exploited by some business persons. Some staff members and students at the campus however expressed their displeasure over the use of the university's campus as a mobile shop saying the sellers had numerous other alternatives.
Stabroek News spoke with several businesspersons who said the exercise was an attempt by the government to undercut their businesses. According to one large distributor there is no way the government could sell cheaper than him. "The only way they could do this is if they subsidized the prices or obtained the goods from a businesspersons in Georgetown under some special arrangement which may have included the promise of a concession or two." Another large Corentyne distributor told this newspaper that the exercise sends a negative message to the business community in the region. "While some businesses might have been charging VAT on zero-rated and VAT-exempt items and exploiting consumers, a number of us are adhering to the law." The initiative, according to one New Amsterdam businessman, was "merely cosmetic, apparently aimed at averting a possible embarrassing protest by supporters of the ruling party within the sugar belt. It would be interesting to see whether it would be sustained and in what areas. The government would then have to become involved on a prolonged basis in the retail and distribution business."
In a statement yesterday, the Ministry of Agriculture said that members of the public were appreciative of the bid to provide products at a reasonable cost via the mobile distribution units.
"The operation of the mobile units offered a temporary competitive alternative for consumers to access basic food items at justifiable prices. Meanwhile similar interventions are being considered for locations where consumers have to pay increased prices for basic food items", the ministry statement added.
GIMPEX and KSIs
Meanwhile, one Berbice businessman said "I hope we are not returning to the days of GIMPEX and Knowledge Sharing Institutes," referring to distribution agencies set up by the PPP and PNC during their respective terms in office during the 1960s and early 1980s.
According to the businessmen, "instead of trying to provide unfair competition for us the government should allow the Guyana Revenue Authority to recruit and train field staff to effectively monitor the system in the regions and ensure businesses are adhering to the tax law."
One businessman explained that he had already paid VAT on some of the items listed under the second batch of 40 zero-rated items and it was unfair for the government to sell these without tax. The selection of two areas only in the two regions to sell the items, according to some, gives the impression that only consumers in those areas were affected by high prices and were being exploited. The use of the university campus was also criticized by some businessmen, saying it is the highest learning institution in the country and not a rural shop.
Meanwhile several Berbicians who say they have also been faced with price hikes since VAT was introduced questioned the selection of the two areas which they say are well-known PPP/C strongholds. They told this newspaper that it smacks of discrimination since almost every Guyanese would have been affected by price increases and not only the residents of Tain and Bath.
According to one pensioner "if the government wanted to assist consumers because of escalating prices they should have done so across the board".
Linden
The mobile unit which was sent to Linden on Tuesday stocked with zero-rated items was poorly supported by residents. Among the items available were packets of sugar, flour, loose white rice, Golden Cream butter, garlic, split peas, and local cooking oil.
Stabroek News visited the truck at around 9:45 am while it had taken up a permanent spot for the day at the Mackenzie Market Square. Customers were few and far apart at the mobile unit in over two hours at this location. However, many more turned up just to compare products and prices.
In invited comments several residents said that the move by the Ministry of Agriculture and the New Guyana Marketing Corpora-tion was unnecessary since most of the products sent to the town did not differ in prices from those sold in the local shops. They added that the average Lindener usually shopped at the end of a week, fortnight or month. "Coming on a Tuesday was not a very wise move," opined one resident. He noted that most commodities that were available on the truck were packaged but residents buy such items loose.
Another said, "We are accustomed to our local people. We can take credit or get cash purchase at anytime of the day. We don't need strangers coming here to take bread out of our people's mouth. What the minister should have done was to organize with local businesses to have such an activity." This, the resident said, could have been done over a period of time and would have put pressure on those businesses that were trying to take advantage of customers while blaming VAT. Similar views were echoed my many others.
The persons operating the mobile shop said they were not certain if they would have been back in the town to conduct a similar exercise. (Additional reporting by Cathy Wilson)