IT is admirable that under this current result-oriented regime, we are seeing a really well-deserved surge of developing policies that are reaping a lot of rewards. While I applaud these initiatives, one of my main concerns is the possibility of a sudden increase in government approved wages, especially in the middle of the year when contracts have already been awarded to various categories of workers, particularly those in the private sector.
Do not get me wrong, I agree that it is vital that we have some kind of wage increase for the lowest-paid employees in the country, but it is also important to bear in mind those employers who have tendered for security services and labour, such as cleaning services, maintenance, etc., and who, with the sudden increase, can very well assert the fact that the cost of providing the service exceeds the rate charged for its provision. Those in authority must take into consideration the timeline as to when this new rate would apply as contracts will have already been signed. They must also recognise that tendered contracts may go beyond that date on the proposed date of commencement.
From the employer perspective, this entails additional expenses on our end without any increase in revenue. My aim of this missive is to highlight the fact that something needs to be done to cushion employers so that we do not see a repeat of what happened when the former Labor Minister, Dr. Nanda Gopaul, boosted government approved wages in the middle of the year that caused much confusion. He did this when most of the contracts had already been signed until the end of the year and some, during the course of the following year. On this basis, I held press conferences and sent letters to the media to appeal to the government to change the date of implementation of the government approved wage or to raise our rates to the percentage of workers’ increased government wages. Since the government did not listen to my appeal, my company was forced by law to submit the notice of termination required and to withdraw our services. Because of our honour and principles, we spent three months trying to negotiate. We ended up losing a large amount and I then later gave the requisite notice and withdrew our services. I did this because it is part of my principle whereby I cannot continue to pay staff below accepted legal wages or exploit the VAT or steal the NIS and PAYE taxes.
As far as the other security services are concerned, they tendered below cost, as usual. However, to compensate for their deficit, they always rob, and even to this day, they are still stealing NIS, workers’ PAYE contributions, and VAT. Many government tenderers, in an effort to survive, would bid below cost, and at times when the government approved wage begins to increase, they steal all of these items in order to stay afloat. This may come as a surprise, but yes, there are many security contractors stealing VAT or part thereof; as there is no mechanism to fully investigate it. The firms that are guilty of this did not renounce the contracts, and others, after a long time, were brought before the courts. These businesses do not pay annual leave or requisite overtime to their staff. One company, which had not paid NIS or PAYE taxes for decades, declared bankruptcy and subsequently changed its name after it had been blacklisted by the NIS and the GRA.
Having changed their name, they started reapplying for these compliances, but they still commit the same crimes, get compliance by clandestine methods, and win some of the big regional and other government contracts in Guyana. There are other companies who win large regional contracts by tendering below costs and manipulating NIS, VAT, and PAYE taxes. The GRA and NIS can easily source the number of workers that are working and the amount of VAT and NIS that should have been paid for the number of workers per area and know almost immediately what they are entitled to. My understanding is that, because of workforce shortages, neither the GRA nor the NIS can do this. Therefore, they should set up a program that would easily discard the information if the VAT and the NIS were not valid and accurate as they should be by contract. I believe this can be achieved easily. I have been offering my services to the NIS for decades now, free of charge, to help give ideas about how to catch those dishonest employers who steal VAT, NIS, and PAYE taxes. Many of whom are considered to not pay corporate taxes or even to declare annual taxes.
Another point to consider is that historically, as wages are increased, there is, to say the least, a rise in water, power, gas, and food. This is understandable because employers need to raise the price they charge for products and services in order to maintain corporate profits. Another frequent concern is that increased costs can reduce job opportunities for government approved wage workers by forcing employers to recruit fewer workers or even to lay off employees. This could be detrimental to the unemployment rate in our country.
With all of the aforementioned in mind, I would respectfully propose that the government offer some kind of measure to cushion contracted employers so that it does not become burdensome on them. Without this cushion, we may be in for some confusion, pandemonium, and havoc.
Additionally, I have always been of the view that giving more dollars with price rises is not the most sensible or wise thing at the moment. Money needs strength! Rental, power, fuel, food costs, etc. must first decrease. I mean, it is prudent that if you keep salaries as they are while at the same time lowering the cost of living, it will be more of a progressive and revolutionary approach.
Hajji Dr. Roshan Kha,n Snr