Rationalise Consumption Tax

Dear Editor,
MR BHARRAT Jagdeo, Leader of the Opposition, has attacked the Government for coming to a settlement with DDL to end a long drawn out legal battle. The settlement was motivated because it was felt that the case was going against GRA; that there would be many more years of appealing to the Court of Appeal and the Caribbean Court, and that inflation at five percent per annum and litigation costs would have eaten away the tax under dispute.

Government, in summary, felt it was a bad gamble, and thought it wiser to collect a substantial sum of money which could be used on social services.

Mr Jagdeo thinks DDL should have paid taxes of between $25B and $30B, which would have destroyed the company, such a sum being very many years the company’s annual profits. With the destruction of that company, several thousand employees would have lost their jobs, and thousands of shareholders and their families would have lost their investments.

In addition, Guyana would have ceased to be the producers of the best rums in the world.

In his statement on the issue, Mr Jagdeo has approached the situation completely from the standpoint of tax collection by GRA; and from this narrow perspective, his position is logical. But it would have been realistic if he had taken cognisance of the people who supply GRA with most of its taxes, and those people come from the business community. If the business community were to be minimised or destroyed, there would simply be no taxes to collect, since the goose that laid the golden eggs would have been killed.

The solution to this problem is the rationalistion of the Consumption and Excise taxes, bringing them into conformity with what obtains in other Caribbean countries. It would be of great national benefit if Mr. Jagdeo could employ his undoubtedly great financial talents in this direction.

Regards,
MITHRA BHUSHAN

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