In declining economy, citizens face punishing taxes

Dear Editor, The APNU regime has recently very proudly announced that it has greatly increased revenue collection. The figures released are impressive.

At the end of February this year the Guyana Revenue Authority collected twenty-one billion, four hundred million dollars ($21.4B). This is 123% of that collected in the same period in 2016. That amount was 17.4B.

Of that huge amount, tax revenue was twenty billion, five hundred million ($20.5B). This was an almost 29% increase from what it was in the same period in 2016. The amount collected in taxes then was fifteen billion, nine million dollars ($15.9B).

What is appalling about these figures is the fact that this was achieved in this time of shrinking economy.

It is well known that the regime has already sent home hundreds at GuySuCo, mainly from the closure of Wales Estate. At other estates, they are greatly reducing operations leading to a fall in production and loss of income by workers.

The private sector is also complaining bitterly of the slowdown in business generally. At first this was noticeable in the city as many areas that were very busy, in the past are now not so. The traffic in Regent Street, etc. is now flowing freely.

Now we see the statistics which confirm that the slowdown is considerable.

The main government apologist media, the ‘Kaieteur News’ on May 3, 2017, carried an article in which the Shipping Association spoke about their business. The source told that paper that container cargo fell 12% this year, compared to the same period last year. This tells about the steep fall in the amount of goods imported in the country. A longer term view of importation will show that the situation is worse than the one-year figures, quoted above.

This is reflected in the same article when the author quoted Laparkan. They informed us that the figure of containers imported at the end of February 2017 was just 50% of the same period three years ago! This is a drastic fall.

In that very article an importer of cloth stated that he used to import a container a month from Panama. However, this year he has not imported any since he still has stock from December last year!

This clearly shows the drastic decline in disposable income that the masses of people are experiencing. As a result of this slowdown, private sector employers are under great pressures. They are cutting back on days given to workers and also forced to dismiss a large amount of their staff.

Many working people are now unable to pay their mortgages and are losing their homes. One of the big problems with the commercial banks in Guyana is bad loans. A large part of this is loans to the housing sector and to agriculture. This is because the government has failed to stimulate the economy and keep it growing.

The dire situation in the productive sector, the real economy, is extremely worrisome as production continues to fall.

The Bank of Guyana report for March 2017 spoke about a fall in sugar production from 5,200 tons in 2016 to 3,700 tons of sugar in 2017 over the same period last year.

During that period bauxite production dropped from 281,000 tons in 2016 to 229,000 tons in 2017. A fall of nearly 20%.

Lumber production went from 25,319 to 21,900 cubic metres in the same period 2016 to 2017.

Again, if we take a longer period of three years into consideration, we would see that the fall is far worse than the one-year glance has given.

Despite the obvious fall in economic activities and the decline in wealth production the increased revenue extracted from the population needs to be examined. Where did the money come from?

It is obvious it did not come from increased value of importation as the government stated. It came from great pressures being put on the people.

Among the taxes that have brought in much revenue to the state is Value Added Tax (VAT).

The regime has turned this tax into something that is very repressive and heartless. It is now placed, not so much on value added to products, but more on essential items that people must use every day.

VAT is now being put on electricity and water, two of the most essential of items that people must use. This is clearly very repressive, particularly to those in the low income bracket.

When the PPP/Civic administration introduced VAT it was careful not to make it oppressive on the people. It exempted more than one hundred items from the VAT. These included foodstuff, educational materials, medicines, etc.

All of these were reversed by the APNU regime. Food items are now taxed, so are educational materials. Worse is the taxing of private education tuition. This is really criminal since it can doom us to a condition of backwardness and perpetual poverty.

The regime by a sleight of hand is spending less on these services, despite the increase seen in the budget. By putting VAT on education and health services the Ministries of Education and Health will pay to GRA billions in taxes. That will effectively reduce what will be spent on our people.

It is also instructive to understand what the increased revenue is being spent on. Expenditure year on year at the end of February 2017 was $29B compared with $18.6B in 2016, a 55.9% increase in spending. Clearly not anything productive.

If one is to examine government’s public works one cannot escape the fact that almost all are projects which the PPP/C had in progress and for which it had garnered funds already. The East Coast highway, the West Coast highway, the Cheddi Jagan International Airport, to name a few were all PPP/C projects.

The additional expenses that this government has relates to the

bureaucracy, its administrative staff. We have seen the huge increase it has given to itself just after taking power. At the same time, they have grown the bureaucracy tremendously. Billions are being wasted to keep this elite lifestyle up.

Just image two Law Professors and three retired Judges are hired as Advisors to the Attorney General. This is only a small sample. Millions are being spent on other increased top level contracted workers. At the same time, they are trying to take away benefits from doctors.

The travelling expenses must have grown through the roof as per diem has gone to the stratosphere and accountability is absent. More often private jets are being used for travel abroad. The regime put a lot of store on ensuring the elite’s lavish lifestyle is maintained.

Clearly, the increased revenue has been and is being extracted from our people for all of this lavish lifestyle of the elite. This government is like bird vine on a healthy tree.

The APNU regime has become very parasitic! Yours faithfully, Donald Ramotar Former President