PRESS STATEMENT By People’s National Congress Reform Thursday, December 7, 2006 Media Centre Congress Place, Sophia




SUMMARY:
• The PNCR continues to have reservations about the implementation date of January 1, 2007 for Value Added Tax;
• The PNCR is concerned GECOM cannot shirk its constitutional duty to determine, with the highest degree of accuracy, the true will of Guyana’s electorate;
• The retention or abolition of corporal punishment has great social implications for Guyana;
• The Government must take responsibility for the postponement of Local Government Elections since by their own admission it took them two years to respond to the latest proposals on the electoral system;
• Questions about the Privatization of Wauna Oil Palm Estate.

VALUE ADDED TAX

The People’s National Congress Reform notes that after its incessant public calls for reconsideration of many aspects of the proposed Value Added Tax, the Government has relented on some issues. These include the zero rating of certain essential consumer goods, educational services and materials, medical services, over-the-counter drugs, etc. The full list of proposed zero-rated items was set out on page 1 of Stabroek News of November 29, 2006. They also include exemptions of certain items and the treatment of stock on hand at December 31, 2006.

The PNCR acknowledges and recognizes the voices of others which were also raised in objection to many aspects of the proposed VAT – consumer bodies, some private sector organizations, the Trades Union Congress to name a few.

We are hopeful that the collaboration and cooperation demonstrated in working together to obtain amendments to the VAT are indicative of the potential to achieving results in other areas where stakeholders have common concerns.

We must also acknowledge the Government’s ultimate responsiveness to some of the areas of concern and hope that this may be indicative of a new dispensation, that is, one in which the government not only hears but listens and acts on reasonable requests by the citizenry and its relevant organizations or institutions. In this regard the PNCR recognizes the obvious active role of the Minister of Finance in taking on board some of the suggestions for amendments to the VAT.

But all issues have not been addressed and at least one new issue has surfaced in the amendments proposed by the Minister of Finance.

The list of food items which are currently exempt from consumption taxes includes margarines and jams and jellies, but these have not been identified for zero rating. Is this an oversight? If so, it should be corrected in keeping with the recommendations of the Select Committee which examined the VAT and Excise Taxes and the related regulations.

According to the Minister of Finance’s speech as reproduced at page 4 C of the Stabroek News of December 3, 2006, “a decision was made not to repeal the Travel Voucher Tax and Premium Tax when VAT is introduced”.

It is also noted that peas other than split peas will not be subject to zero rating. Since some of these are grown locally, e.g., black eye and pigeon peas, the logic for subjecting them to 16% VAT is not understood.

The VAT Act of 2005, No. 10 of 2005 has already repealed the Travel Voucher Tax Act (Cap 80:09) and provisions relating to Premium Tax (Income Tax Act, Cap 81:01). These taxes stand repealed under current law to come into force on January 1, 2007. What is therefore envisaged is a reinstatement of these repealed laws.

But there has been no public explanation about the reasons for this proposal which we anxiously await.

What is important to note at this time is that the yield of these taxes is of the order of $900 million per annum and this, the PNCR suggests, strengthens the case for a reduction in the rate of VAT. According to the government estimates every 1% of VAT should yield, on the basis of revenue neutrality approximately $1 billion. Therefore, if revenue of just under $1 billion is being restored then, on this account alone, the rate of VAT could be reduced to 15%.

The PNCR also contend that the net yield of VAT using realistic GDP figures yields positive revenue of over $3 billion. Applying the same principle suggests that if revenue neutrality is truly the objective a further 3% reduction in the rate could be effected making the rate applicable 12% rather than the proposed 16%. We urge the Government to review the rate of VAT proposed in keeping with the stated objective of revenue neutrality.

The PNCR continues to have reservations about the implementation date of January 1, 2007. We note the stepped-up visibility of the Guyana Revenue Authority (GRA) personnel trying to explain VAT to the public. We believe it would have been helpful to the process to have had other stakeholders at such presentations. This would have allowed for questions to be put, comments to be made and general discussion to take place on VAT all of which would have been to the further enlightenment of the citizenry. Maybe, it is still not too late to embark on this approach.

The PNCR has previously made the point about the state of readiness of GRA to implement. While we agree with the Hon. Minister of Finance that we could not wait for perfection to implement we would proffer that there must be a minimum state of readiness by the relevant authority before we implement. The PNCR does not believe that such minimum state of readiness exists or will be in place by January 1, 2007.

We therefore continue to urge for a deferral of the date of implementation.

RESULTS OF THE 2006 GENERAL AND REGIONAL ELECTIONS

On November 17, 2006, the Leader of the Opposition, Mr. Robert Corbin, wrote the Chairman of the Guyana Elections Commission (GECOM) concerning this matter and, as we indicated to you in our Press Statement of November 24, 2006, the General Council of the Party mandated the leadership to vigorously pursue the matter with GECOM.

Since then the Chairman of GECOM has responded indicating that the Commission has instituted investigations into the matters raised though he seems to suggest that legal luminaries are advocating that the Commission may not comment on the issues raised.

As far as the PNCR is concerned GECOM cannot shirk its constitutional duty to determine, with the highest degree of accuracy, the true will of Guyana’s electorate. We have therefore clarified in a recent response to the Chairman of GECOM what it is that we seek to have addressed by that body.

To remind members of the public we have drawn to GECOM’s attention information arrived at from GECOM’s CD suggesting that the Justice For All Party (JFAP) may be entitled to a Top Up seat and the Alliance For Change (AFC) to the Regional seat allocated to the PPP/C in Region 10, while having to give up one of its Top Up seats.

We are requesting GECOM to determine whether this information is accurate and, if it is, to fulfil its constitutional duty by correcting the inaccuracy.

We shall continue to follow this matter with great diligence.

THE ALLIANCE FOR CHANGE MOTION ON CORPORAL PUNISHMENT

Today, Thursday December 7, 2006, a Motion submitted by the AFC Member of Parliament, Ms. Chantelle Smith is scheduled to be debated in the National Assembly. This Motion which for ease of reference we refer to as “The Corporal Punishment Motion” calls on the National Assembly to:

• Declare the continued use of corporal punishment in schools in Guyana a violation of Article 19 of the United Nations Convention on the Rights of the Child;
• Declare the continued use of corporal punishment in schools in Guyana a violation of the constitution;
• Recommend the abolition of the corporal punishment under the New Education Act.

The PNCR is aware that in 2004 the Ministry of Education established a Task Force with a mandate to produce recommendations for a New Education Act. We are also aware that this Task Force has had public consultations in all 10 Regions of Guyana and has also met with various stakeholders, including a meeting in November 2006 with the Alliance for Change.

During these consultations the issue of corporal punishment in schools was raised and discussed with strong representations made for and against the continued use of corporal punishment.

The retention or abolition of corporal punishment has great social implications for Guyana and the PNCR strongly believes that the Task Force established by the Ministry of Education must be allowed to continue and widen its consultations with all sections of the Guyanese society.

The PNCR believes that important social issues such as corporal punishment and casino gambling, to name but two, should benefit from the widest possible involvement of our people so that legislation when enacted will truly reflect the needs and aspirations of Guyana.

In keeping with this belief we have submitted to the National Assembly proposed amendments to Ms Smith’s Motion. These amendments if accepted by the National Assembly will ensure that the way the New Education Act treats with corporal punishment is a reflection of the will of the Guyanese people.

We have also discussed the proposed amendments with a designated AFC Member of Parliament in the hope that common ground may be found for a consensus Motion.

For those who believe that while corporal punishment in schools continues to exist it is a violation of Article 19 of the Convention on the Rights of the Child attention is drawn to Article 154A(3) of our constitution which, in dealing with International Treaties (including the Convention on the Rights of the Child) states, “The State shall, having regard to the socio-cultural level of development of the society, take reasonable legislative and other measures within its available resources to achieve progressive realization of the rights provided for ……”

LOCAL GOVERNMENT ELECTIONS

The annual ritual of postponing Local Government Elections is once again with us. Undoubtedly the government will contend that the reform process is responsible for the postponement. The government must take responsibility for the postponement since by their own admission it took them two years to respond to the latest proposals on the electoral system. In fact the government has only very recently indicated its willingness to have the Joint Task Force on Local Government Reform meet. The PNCR looks forward to dealing with such critically outstanding issues as:

• electoral reform,
• fiscal transfers,
• establishment of the Local Government Commission,
• recall of councilors, and
• provision for autonomy for Local Government councils.

The PNCR fully supports the recommendations by the Commonwealth Observer Mission to the 2006 General and Regional Elections, that there should be a new voters’ list on the basis of house to house registration before Local Government Elections.

While the PNCR recognizes the importance of time of equal importance is the completion and completeness of the implementation of the reforms, at the earliest practicable date.

The PNCR stands committed to working for the realization of these reforms.

PRIVATIZATION OF WAUNA OIL PALM ESTATE

The People’s National Congress Reform has noted with concern reports emanating from communities in Region No. 1 about the lack of transparency surrounding the possible privatization of the Wauna Oil Palm Estate.

The PNCR understands that tenders were invited for the privatization of the company and a number of potential investors responded. The Privatization Unit disqualified the highest bid claiming that it was vague. The Unit then proceeded to seek clarification from the remaining tenderers which results in submissions that significantly altered their original proposals. The award, it is understood, was made to an investor who offered one dollar ($1.00) but who eventually walked away from the deal citing unwillingness of the Government to provide certain guarantees.

The PNCR understands that the Government has called another businessman and offered him the Wauna Oil Palm Estate for the said sum of one dollar. It is alleged that this businessman was not part of the original tender process. If this is true then the Government’s offer to the businessman is highly irregular and totally lacking in transparency.

The PNCR calls on the Government to clarify the situation with respect to the privatization of the Wauna Oil Palm Estate.


People’s National Congress Reform
Congress Place, Sophia
Georgetown, Guyana
Thursday, December 7, 2006