The Guyana Manufacturing and Services Association (GMSA) wants the government to expand the VAT-free basket of goods to include more categories of locally manufactured goods.

In a statement, the GMSA said it is no way implying that the government should impose VAT on identical imported goods, but rather its request is for the benefit of consumers who would pay less taxes on local products.

The private sector body also clarified that its call does not violate international or regional trade laws, as it would not give domestic goods an unfair advantage over foreign goods once the product has already entered the domestic market.

“It therefore means that foreign producers would be able to import their goods (i.e., identical items) into Guyana without paying VAT. Thus, we are accorded the same treatment pursuant to Articles 3(2) and 3(4), provided that our proposal is approved by the government,” the GMSA said in a release.

In addition, GMSA said with Guyana’s small population, the removal of the VAT on locally manufactured goods could lead to increased revenues and expansion for businesses and allow Guyanese agro-processors in said categories of goods to become more competitive in the export market.

“In fact, removing the VAT on locally manufactured goods will benefit consumers since it is a consumption tax. This would reduce the cost of the products, which would make them more affordable for the consumer. GMSA also supports the removal of VAT on data, especially at the small and medium business level, as this would reduce transaction costs and encourage technology usage,” the GMSA noted.

Explaining that the manufacturing sector accounts for 5% of non-oil GDP and is a major employer in Guyana, the GMSA said that rremoving the VAT on its proposed list of locally manufactured goods would help to create jobs and boost economic growth by virtue of the sector being more competitive.

The Organization described VAT as a regressive tax that disproportionately affects low-income families and households.

Related posts:

Government earns $3.4 Billion more in VAT in first six months of this year Food and Drug Analyst Department concerned about attempts to import counterfeit food products Tributes pour in after passing of GMSA President Higher prices for products and services if import taxes are imposed – Manufacturing Association