Back to Press Page

12TH APRIL 2005
MEDIA RELEASE
PSC Statement on the Introduction of Value Added Tax (VAT)

The Private Sector Commission (PSC) notes with dismay the decision by the Government to proceed with Bill #3 of 2005 Value Added Tax Bill without adequate consultation with stakeholders in general and the private sector in particular. This is in breach of an undertaking given by the Government in late November 2004 to consult with the sector before the passage of the relevant legislation.

The PSC sees it as fundamental tax reform which requires the widest possible consultation to ensure the participation and co-operation in the implementation phase.

While the PSC recognises the several positive features of a Value Added Tax, there is extensive evidence from around the world that the successful introduction of the VAT requires as a minimum the active participation of stakeholders in design of a sound policy with clear objectives, simple laws and procedures, an appropriately structured and resourced administration, and appropriate compliance strategies.

The PSC considers that having regard to the current state of preparation, the time-frame of one year for the implementation of the VAT is unrealistically short. We therefore call on the Government to convene a conference of all stakeholders to review the status of the preparations and to adopt a strategy designed to deliver a system of expenditure tax most appropriate to the Guyana circumstances. We also call on the Government to suspend passage of the Bill to allow a thorough review and feedback from the business sector and other stakeholders.