Georgetown, Ministry of Finance, March 24, 2021:
Senior Minister in the Office of the President
with Responsibility for Finance Dr. Ashni Singh is sending a stern warning to businesses that should they continue to flout the laws and unscrupulously attach a 14 percent Value Added Tax (VAT) to items on which the VAT has been removed or has been reduced, they will face the full force of the law as this illegal practice is denying consumers the right to ultimately enjoy reduced prices on various commodities including construction materials.
The Minister is reminding the public that when the last 2021 Budget was passed in the National Assembly on March 4, 2021, it would have outlined a number of measures including the VAT zero- rating or reduction of VAT or duty previously charged on a number of commodities.
Consequently, Order Number 6 of 2021 of the Value Added Tax Act Cap.81:05 of the Laws of Guyana came into effect immediately for VAT zero-rating of certain construction materials namely stone imported for construction and housing from Caribbean Community (CARICOM) countries, locally produced pre-stressed concrete piles and locally fabricated mild steel beams for building construction and locally manufactured roofing and PVC products for building construction. Import Duty on Industrial Grade Cement was also reduced from 15 percent to 5 percent.
Additionally, the VAT zero-rate was also restored to basic food items and household necessities that were previously zero-rated up to May 2015 but switched to ‘standard-rate’ or ‘exempt’ over the past five years, e.g., basic wheaten flour, basic breads, oats, unflavoured cracker biscuits, cooking oil, locally produced bed sheets and pillowcases and toothbrushes.
Prior to this, an emergency Budget was also passed in Parliament on September 25, 2020. This Budget also stipulated the VAT zero rate or removal of VAT on other commodities including the overall removal of VAT on electricity and water. Therefore, since then, VAT would have also been removed from hinterland travel and cell phones, as well as building and construction materials.
The Senior Finance Minister recalled that all of these measures were intended to benefit consumers and ease the expense aligned to these previously burdensome tax measures and with their removal or reduction, the expectancy was that it would have ultimately allowed for the reduction in the cost of living of Guyanese generally.
It has come to my attention through various reports from members of the public that a number of hardware stores have since refused to comply and are still unscrupulously charging VAT on several items,” the Minister said.
Dr. Singh added that he is therefore warning such establishments that this illegality will not be tolerated. As such, he pointed out that he has already instructed the relevant agency-the Guyana Revenue Authority (GRA) to ensure that countrywide checks are made to enforce compliance.
The Senior Finance Minister then warned that the businesses found flouting the laws and continuing to deprive consumers and customers of these benefits will be dealt with according to Law.