Tax on raw materials is in keeping with CARICOM’s Common External Tariff – Minister Jordan

Georgetown, GINA, July 15, 2016

Minister of Finance, Winston Jordan said the recent enforcement activities in relation to the implementation of taxes on raw materials for local manufacturers are in keeping with the Caribbean Community’s (CARICOM’s) Common External Tariff (CET).

Minister Winston Jordan in an interview with Government Information Agency (GINA) said, “It’s not contrary to what’s happening in other countries, other countries are paying, it’s under the Treaty of Chaguaramas. The fact that we had been delinquent in the payment doesn’t mean that it is right to continue,” the Minister said.

Further, Minister Jordan said that despite Guyana being delinquent by not applying the taxes previously, the delinquency cannot continue indefinitely since there are consequences attached.

“It is a local manufacturer who drew it to our attention and once that became known we couldn’t just ignore it because we don’t know what would have been the subsequent consequences of having been told and us not acting on it. They could have complained further. They could have complained to CARICOM because they themselves were being affected by the particular act,” Minister Jordan explained.

The former People’s Progressive Party/Civic government was taken to the Caribbean Court of Justice in May of 2012 by Rudisa Beverage Company. The Surinamese company cited unfair treatment under the Caribbean Single Market and Economy (CSME).

“You know the last time we failed to enforce the law or treat people equally; it cost us about $1.5 Billion.  If you remember the Rudisa case, we also have, I believe a case outstanding with the Trinidad Cement Limited (TCL) where we failed to impose the CET for cement that came extra- regionally some years ago, and TCL took us to court,” the Minister reminded.

Additionally, the Minister said that while government cannot arbitrarily grant relief from the CET, it has met with the Guyana Manufacturers’ and Services Association (GMSA) and indicated its readiness to approach the Council for Trade and Economic Development (COTED) for exemptions on raw materials for local manufacturers.

A list of raw materials has been requested from the GMSA, which upon submission, will be forwarded to the Ministry of Finance for representation to be made to CARICOM for relief to be granted by COTED.

Minister Jordan further expressed government’s willingness to explore other ways through which the local manufacturing industry may receive relief from the effects of the taxes being imposed.

“It is not a local tax; it is under the Treaty of Chaguaramas and is required for all members of CARICOM. We just can’t sit and cry over something that is not a government imposition and should have happened before. Let’s knock our heads together and see perhaps where relief can be given in another area. The government is not averse in looking at any suggestion in that area,” the minister pointed out.

Local manufacturers have complained about government’s decision to implement taxes on imported raw materials.