GEORGETOWN, Guyana – Government will be keeping its promise to review the tax system and this process will begin soon, according to Finance Minister Winston Jordan.
During a recent interview the minister said the 100-day agenda that includes the review of value added tax was attracting immediate attention.
“Within the 100 days we are expected to put together a tax reform committee that is expected to look in a more long term way about taxes in general,” he said.
He pointed out that as the minister of finance, he does not favour ad-hoc approaches to taxation, “particularly if you do not have the benefit of a study to know what would happen if you do x, or you do y, but I agree with the public, you should clamour to pay low taxes. Citizen Jordan will be clamouring for low taxes, but Minister Jordan is a different story, and every time somebody makes a demand for reduction and has all the right reasons, you have to know what the reduction will result in, in actually loss of revenue, or gain in revenue.”
He added that he learnt that in terms of what are called “poor people items”, there are 150 of these that are already exempted from VAT.
“There [is] little that is left that could attract further zero rate, so . . . to entertain further reduction is to narrow the tax base.”
Jordan added: “Now when you look at it on two sides there’s a clamour on the revenue side to reduce, effectively reducing revenues. There’s a clamour on the expenditure side to effectively increase wages.”
This increase, he said, would effectively increase expenditure. As minister in the “hot seat” he said that he has to look at all of these factors and ensure there is “a judicious mix”.
“You’re not going to please all the people on the expenditure side, and you’re not going to please all the people on the revenue side who are asking for the decline. What you’re hoping for is a balance and you’re hoping that it will net out at the end of the day,” he said. (GINA)
