VAT on forestry products can be reviewed if proved to be harmful-Minister Jordan
GINA, GUYANA, Tuesday, May 02, 2017
Minister of Finance, Winston Jordan reiterated that he is willing to remove the 14 per cent Valued Added Tax (VAT) on forestry products if evidence can be provided to show that the tax was hurting the lumber industry.
The minister expressed his views when he spoke at the launch of the government’s “Housing Solutions 2017 and Beyond,” programme on Friday at Perseverance on the East Bank Demerara (EBD.)
The minister explained that representation was made to him by the private sector that the “VAT was killing the industry.” The Minister expressed the view however, that he did not believe that the industry was being killed. “If it was killed, it was a long time ago, when we allowed pine and sheet rock to come in at undervalued price and we allowed it to knock out our own fledging industry, but they have said that this VAT is killing them, so I said bring the evidence and if it is, not only will we remove the VAT, but we will give further incentives so that the lumber industry can grow and be competitive in Guyana,” the minister said.
He explained that government will give further incentives to the industry because unlike the previous administration, “we want significant resources in the building of houses to emanate from Guyana.”
“We do have those resources, and we showed it in the 70s and 80s when houses were being built in Guyana, and most of the materials came from Guyana unlike what happened up to May 2015 when almost all of the resources were being imported,” the minister said.
Since the addition of the tax, the Forest Products Association (FPA), among other private sector advocacy bodies whose members include some of the country’s biggest loggers, have expressed alarm over what they describe as an imposition of the VAT on local products.
The loggers have since appealed to the government to retract the VAT on the grounds that it will have a number of crippling and negative impacts, including making the products uncompetitive and leading to a virtual shutdown of the sector, mass unemployment, in particular Amerindian communities and of other persons living in the interior.
They had also claimed that the VAT introduction will see a reduction in production and export earnings leading to a foreign currency shortfall.
Recently Prime Minister Moses Nagamootoo had explained that following the public outcry that the government will be reviewing a number of the taxation measures implemented this year, towards reaching solutions that would benefit both the people and the administration. The Prime Minister however, had advised that a decision on these would not be forthcoming this year.
Forest products that have since February 1, 2017 begun attracting VAT include, logs, shingles, staves, lumber (rough and dressed), piles, poles, posts, spars, veneer, plywood, charcoal, firewood, wattles and manicole palm.
By: Macalia Santos