Thursday, June 19, 2008

AFC flays gov’t move to amend tax break law -says illegal concessions should be withdrawn

AFC flays gov’t move to amend tax break law -says illegal concessions should be withdrawn
Stabroek News news item. Thursday 19 June 2008

The Alliance for Change (AFC) yesterday lashed out at the Government for its planned amending of the Fiscal Enactments (Amendment) Act 2003 to give legitimacy to several concessions to be made available to Queens Atlantic Investment Inc (QAII).
The concessions are to be provided for two projects described as pioneering: an antibiotics research and development facility; and a textile manufacturing venture.

Minister of Finance Dr Ashni Singh had announced Government’s intention in a press release issued on Sunday. This was after the publication of an article based on a column by Business Page Columnist Christopher Ram who pointed out that the two projects did not qualify for tax concessions under the Act’s definition of pioneering industries.

Speaking to this newspaper yesterday, AFC parliamentarian Khemraj Ramjattan said: “The law is the law and Government ought not to have granted the concessions to QAII.”

He said that the Government is further compounding the situation when they try to blame the law for being badly worded. “They cannot now [go back and change the laws]. That is tantamount to corruption,” Ramjattan said.

“What was given wrongfully should now be taken back. It is retrogression to make a wrong right by amendments,” he said.
In its Sunday statement, Govern-ment sought to justify the two ventures as pioneering by saying: “Government considers that the two Sanata projects earmarked for tax holidays deserve to be granted tax holidays as these activities are currently not performed in Guyana and represent new pioneer projects of a developmental and risk taking nature with employment and investment benefits to Guyana. These projects will see the establishment of significant value-added manufacturing operations in Guyana, specifically in the areas of denim textile production and antibiotic manufacturing, and include a joint venture with international partners.”

In the statement, the ministry said: “On closer examination, the current Fiscal Enactments (Amend-ment) Act 2003 does not reflect Government’s intent when the said Bill was laid in Parliament. In this respect, Government will be moving to amend the law to clearly provide for all pioneering projects, infrastructure projects, and correct the list of regions eligible for tax holidays.”

It added that the rules in respect of taxes have been amended over the last five years to minimize discretion and to move towards a tax system based on principles and rules in law.

Noting that the tax concessions were announced by Head of Go-Invest Geoffrey Da Silva on May 19 at a press conference, the ministry said that the tax holidays have not yet been granted to QAII by “the GRA (Guyana Revenue Authority) and the Minister of Finance.”

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