PPP/C recklessly ignored 12 COTED warnings that environmental tax violated treaty

Mr Anil Nandlall, former Attorney General, berates the government for not settling its environmental tax case with SM Jaleel and its subsidiary Guyana Beverage Inc, a decision on which was handed down by the CCJ on May 9. Had Mr Nandlall disclosed that the root of the problem was the PPP’s failure to withdraw the 1997 tax which became unlawful on the coming into force of the Revised Treaty of Chagauramas in 2001, his letter would have had more credibility. In fact, the PPP recklessly ignored twelve warnings from the Council of Trade and Economic Development (COTED) of Caricom between May 22, 2001 and March 30, 2012, that the tax was a violation of the Revised Treaty of Chagauramas (RTC). Mr Nandlall places the blame on APNU and the AFC for their failure to support an amendment in 2013 but does not state why the PPP/C did not use its majority prior to 2011 to amend the legislation, or why it did not simply stop collecting the tax after it lost its parliamentary majority, as the CCJ pointed out.

It is also important to recall that Mr Nandlall himself argued the similar case brought by RUDISA against the government but failed to raise important points of law, one of which the CCJ indicated would have been an attractive proposition. The CCJ ruled in its entirety against Guyana in RUDISA which was awarded judgment for the full sum of US$6,047,244 they claimed. In the SM Jaleel case, the claim against Guyana was for $2,277 million for the period January 2006 to August 7, 2015. The CCJ ruled, however, that only $1,178 million collected between May 7, 2011 and August 7, 2015 must be refunded. That works out at approximately 52% and after tax adjustment to approximately $700 million.

I believe that Mr Basil Williams was right in taking the case to the CCJ and that Guyana has reason to consider that the ruling was particularly harsh against it. In fact, had the CCJ not rejected two applications by Guyana for reasons that are highly debatable, Guyana would have fared much better. The applications were to produce expert evidence from Dr Maurice Odle and me, and the second a request for documents. Continue reading PPP/C recklessly ignored 12 COTED warnings that environmental tax violated treaty

Government applied different standards to VAT on medical services from those on education services

Clearly unmoved by fifteen thousand signatories and the heartfelt arguments, pleas and entreaties of hundreds of parents and students at the Government-Parents-Adminis-trators VAT on Education consultation, Cabinet’s subsequent announcement of no review of VAT on education until 2018 has effectively killed any further meaningful discussion on this issue. In this my last contribution to the debate, I write only to show how the government has applied vastly different standards to VAT on medical services and education services, and more particularly private education services.

In his Budget 2017 Speech, the Finance Minister announced proposals to “expand the list of exempt items and [to] eliminate all zero-rated items, with the exception of those pertaining to exports and manufacturing inputs.” In neither list of exempt nor zero-rated items attached to the Budget Speech did education or health services appear, meaning that those items, both of which were previously zero-rated, would become taxable. The doctors at a meeting at the Ocean View Hotel protested and lo and behold, when the actual law was published, not only did health services mysteriously appear in the exempt list (Schedule II), but whole ranges of medical supplies appeared on the zero-rated list (Schedule I). Continue reading Government applied different standards to VAT on medical services from those on education services

The case for VAT on education is weak to non-existent

The decision by Dr Rupert Roopnaraine, Minister of Education, to meet five parents and Swami Aksharananda, educator, as representatives of the group protesting outside of his ministry against VAT on education services on April 5 was commendable. Coming on top of the Cabinet decision to hold a consultation with the public at the National Cultural Centre today Friday, April 7 at 11 am, there is some hope that the government is finally ready to reverse the decision to impose VAT on education.

Why it has taken the government over four months to do the right thing is baffling. Almost every argument by the government has been met with cogent, rational and compelling responses. Here are some of those arguments and the responses. Continue reading The case for VAT on education is weak to non-existent

PPP/C’s Income Tax Act amendment is also unconstitutional

The Stabroek News of Friday January 6, 2017, reported that two parliamentary representatives of the PPP/C criticised but abstained from voting on an amendment to the Value-Added Tax giving the Commissioner General the right to prevent persons, through the Chief Immigration Officer, from leaving the country once they owed VAT.

And in the letter columns of the Stabroek News of January 7, former Attorney General, Mr Anil Nandlall returns to the issue with a reasoned argument whether the amendment violates the Constitution and is therefore void (‘Section 45 of the VAT Act is unconstitutional’).

This is interesting because in 1993 then PPP/C Finance Minister, Mr Asgar Ally inserted by way of an amendment to section 71 of the Income Tax Act a new provision that is arguably more dangerous than the APNU+AFC’s amended VAT provision. Taking Mr Nandlall’s argument, it means that the PPP/C’s amendment to the Income Tax Act is, at best, on the same tenuous constitutional ground as the APNU+AFC’s amendment to the VAT legislation.

Garnishment and Distress Proceedings

Two proposals announced in 2017 Budget Speech – inserting into the Income Tax Act distress proceedings similar to the provision in the Value-Added Tax (VAT) Act, and garnishment of funds in bank accounts for the settlement of tax arrears – have caught the national attention. The discussion has not been helped by the misinformed and misguided statements in the media, even by columnists and persons who have a duty to be better informed.

That failure which is the cause of much of the confusion, misinformation and “noise”, has led to a situation whereby two very different provisions are conflated and wrong premises are used to defend or justify the two proposals. They should be addressed separately. Here is why.

The terms garnishment and distress are of significant legal and constitutional import and depending on circumstances may have different application to action against the person (in personam) and against the thing or property (in rem). As these matters apply to our Constitution they also raise the tension, if not the clash, between, on the one hand, Article 65 which grants to Parliament the power to “make laws for the peace, order and good government” and on the other hand, Article 142 which protects property rights subject to exceptions, as well as Article 8 which makes void any law inconsistent with the Constitution. Continue reading Garnishment and Distress Proceedings