TAX exemptions and concessions amounting to over $55B were given out in 2014 alone by the then People’s Progressive Party (PPP) government, Junior Finance Minister, Jaipaul Sharma revealed in the National Assembly on Monday. The minister made the disclosure while speaking to a Motion regarding tax measures introduced by the government.
According to Minister Sharma, “$55B was given in tax exemptions and concessions to friends and acquaintances of the PPP” in 2014. Those ‘breaks’, he said, amount to one-quarter of the 2017 National Budget.
He told the National Assembly that the figures he quoted are “factual”, in that they could be proven by reports from the tax regulatory body, the Guyana Revenue Authority (GRA).
Noting that it was no coincidence that the PPP did not produce tax reports while in office, the minister said:
“While they were in power, they wilfully did not produce any reports for GRA, because they did not want the nation to know what they were giving in tax exemption and concessions.”
Referencing several ailing industries, including sugar and bauxite, the minister said that those monies could have been used by the then government to help these sectors. He also said that some of that money could have been used to help to increase public servants’ salaries.
“Imagine what this money could have done for the sugar industry or the bauxite industry; for gold miners,” he said, adding: “Teachers, nurses and other public servants could have benefitted significantly.”

VOTED DOWN
Meanwhile, a Motion brought to the House by Opposition Chief Whip, Gail Teixeira, to have a restoration of zero-rated items in the Value Added Tax (Amendment of Schedules) was voted down by the government.
The Motion sought to have the government repeal the VAT (Amendment of Schedules) order made in 2016, which comes into effect on February 1, 2017. Additionally, the Motion, if passed, would have seen the finance minister reinstating, and bringing back into force, Schedules I and II, which existed before these orders.
According to Teixeira, the Motion was intended to have a number of items from the VAT-exempt list shifted back to the VAT Zero-Rated list, since it puts businesses at a disadvantage.
Teixeira explained that suppliers of zero-rated goods/services can still reclaim all their input VAT from the GRA.
However, with Government moving some of those zero-rated goods to vat-exempt goods, she reasoned that businesses cannot reclaim VAT from the GRA.
She noted, too, that what this will result in is businesses charging higher prices for their products, since they would not be able to reclaim VAT.
EXHAUSTIVE DISCUSSIONS
However, Minister of Finance, Winston Jordan, who opposed the Motion, noted that it was the subject of ample and exhaustive discussions in the House since last year.
He explained that when the VAT Act was implemented in 2007, VAT, as a percentage of total revenue collected by government, was 27.6% of the country’s total revenue.
He further noted that by 2008, this figure had jumped to 30.4%; and when the PPP exited office in 2015, it had regressed to 24.8%.
“So, while the economy was growing, the VAT collection was declining,” the minister said, adding:
“One reason is because the policy measure put in place was weakening the VAT base.”
He, however, went on to say that by 2016, the Coalition Government had made nearly 50 food items exempt, which caused the VAT base to decline to 24% of total revenue collection.
With a decline in revenue collection, Minister Jordan noted that there could be several serious implications, one of which is the slow-down of development.
“We made a promise that we will reduce the VAT rate, and that we will reduce food items, removing them from zero-rated to exempt,” he said in defense of the new tax measures.
“But we have always said that to do any reduction would be a broadening of the base,” he told the House.
Speaking on the Motion also was Opposition spokesperson on Health, Dr Frank Anthony, who explored the implication on the health sector, and how Guyanese would be impacted.
After hours of debating it, the Motion was eventually voted down by a government majority.