IMF team to assess VAT to determine feasibility of reduction
A team comprising experts from the International Monetary Fund (IMF) is due in Guyana next month to assess the Value Added Tax (VAT) and recommendations made by the Tax Reform Committee set up by the APNU + AFC government.
According to the Government Information Agency (GINA), Minister of Finance, Winston Jordan said, “notwithstanding what the Tax Reform Committee said, and notwithstanding the clamour for the reduction in VAT, I have asked the IMF and they have agreed and the team is to come in August to do an assessment of the Value Added Tax.”
Minister Jordan said, after they would have completed their assessment “we will take a look, and we will make a determination to what reduction is feasible and when this reduction can take place.”
The Government in late 2015 had established the Tax Reform Committee headed by Dr. Maurice Odle. The committee’s mandate was to examine the country’s taxation system and make recommendations for fixing it.
The committee had reported its findings to the Minister of Finance in January 2016, a time described by the minister as too late to have the recommendations included in the 2016 budget.
Among the recommendations of the Tax Reform Committee were an income tax threshold of $750,000 with progressive rates of taxation from 20% to 35%, reintroduction of estate duties and levies on tobacco and alcohol. In the last budget the income tax threshold was increased to $660,000 from $600,000. Meanwhile steps are underway to formulate a Bill for the control of tobacco.
Further, the Minister said the Guyana Revenue Authority (GRA) has been approached for its input on the recommended tax reforms.
Among the recommendations of the Tax Reform Committee were a reduction of VAT from 16 percent to 14 percent, the introduction of an intermediate rate of seven percent, a reduction of the number of items on the VAT exempt list and a widening of the tax net by reducing the minimum taxable amount from $10M to $5M, Minister Jordan said.
Meanwhile President David Granger on an edition of the programme “the Public’s Interest” had said it was perhaps hasty on the part of the then opposition (APNU+AFC) to promise a reduction on the VAT rate during their first year in office when they had inadequate information on what they would find when they assumed office. (GINA)