Guyana could have successfully defended the action by Rudisa/CIDI

Mr. Anil Nandlall, former Attorney General, has raised on his Facebook page the issue of the Environmental Tax paid by the Surinamese company Rudisa and its Guyana subsidiary Caribbean International Distributors Inc. (Rudisa/CIDI). He suggested that the current Attorney General “either did not study the [CCJ] case or having done so is still unappreciative of its gravamen.” The decision in that case was handed down on May 8, 2014 but the PPP/C Government did not comply with an order of the Court that the Government repay with interest the sum of US$6,047,244.77, and further amounts collected up to the date of the judgment. The matter was resolved only after the APNU+AFC Government gave an undertaking to cease collecting the tax and to repay the full amount collected from Rudisa/CIDI.

Mr. Nandlall was not the AG when the PPP/C introduced the tax in 1995 but it would have been gracious of him to acknowledge that the PPP/C Government erred when it introduced a tax that clearly violated WTO Rules, and compounded its error by continuing to collect the tax from CARICOM companies after the Revised Treaty of Chaguaramas was incorporated in Guyana domestic law in 2006.

The matter has assumed important currency following the commencement of a similar action in the CCJ by the Trinidadian-owned Guyana Beverages Inc. which has paid more than two billion dollars in Environmental Tax. That money, like the Rudisa money, was spent by the past administration, and the current Finance Minister is faced with the serious risk of having to pay back this huge sum. In an ironic twist of fate, proposed legislation to address the problem introduced in 2013 by the PPP/C administration was rejected by the APNU and the AFC MP’s! Continue reading Guyana could have successfully defended the action by Rudisa/CIDI

Guyana must comply with CCJ’s ruling on the “environmental” tax

Introduction
On May 8, the Caribbean Court of Justice handed down a decision in a case against Guyana brought by a Surinamese manufacturing company Rudisa Beverages & Juices N.V. and its Guyana subsidiary Caribbean International Distributors Inc. In essence the two companies were claiming a refund of what is called under the Guyana’s Customs Act an environmental tax of $10 on the importation of non-returnable beverage containers. The two companies asked the regional court which is the protector of the Revised Treaty of Chagauramas (RTC) among other things, to order Guyana to refund to them the sum of US$6,047,244.47 paid by them to the GRA up to 24th October 2013 and any further amounts paid since that date.

After submissions and arguments which began in June last year, the Court:

A) Declared that the collection of the environmental tax in relation to goods of CARICOM origin is incompatible with the RTC; and

B) Ordered Guyana to:

i) Immediately cease the collection of environmental tax on imported non-returnable beverage containers;

ii) Pay to CIDI the sum of US$6,047,244.47 together with such further sums paid by them from 25th October 2013 to the date of this judgement;

iii) Pay interest on the sums payable by this judgement at the rate of 4% per annum from the date of the judgement; and

iv) Pay the costs of these proceedings to be taxed if not agreed.
Continue reading Guyana must comply with CCJ’s ruling on the “environmental” tax

A sea change in the Caribbean – Arthur goes

Introduction

In a dramatic message, one of Barbados’ most successful prime ministers and perhaps a driving force behind the Caribbean Single Market and Economy (CSME), was told unequivocally by voters this week – time for a change. Despite an enviable record of achievement over the last thirteen years, Prime Minister Owen Arthur’s Barbados Labour Party lost overwhelmingly to the Democratic Labour Party in what Guyanese journalist Dr Rickey Singh referred to as the mother of all elections.

A television journalist who comes from Arthur’s constituency on a post-elections panel discussion broadcast across the Caribbean was visibly emotional as she expressed a mixture of shock and disappointment at the loss of a Prime Minister who had won respect and admiration from his fellow Barbadians, the Caribbean people and their leaders and the international community as a straight-talking, competent leader.

Arthur championed not only the case for his country but the cause of CARICOM, and came to the defence of Guyanese after some popular anti-Guyanese rhetoric from that country’s press. His government’s loss at the polls – he himself won his constituency by a margin of two to one – at the very least will impact on the progress of the CSME and it places a huge responsibility and opportunity on the other regional leaders to keep the momentum going.

Courage

Perhaps it was his years in Jamaica where as an economist and a committed Caribbean nationalist, he worked in Economic Planning with the Michael Manley government and as Director of the Jamaica Bauxite Institute in the late eighties before returning to Barbados where he practised his trade as an economist, later turning his attention to politics. At home he is credited with having saved the Barbados dollar from devaluation against the wishes of many, including the international financial institutions and critics. They argued that with Barbados inflation running above the rate in the US, it was foolhardy to retain theoretical parity with the US dollar. It was that act of courage, defiance and the national pride in the ‘strength’ of the Barbados dollar (US$1 = B$2) that won him such admiration from his people. Equally importantly he ensured that the economy did not falter in the wake of 9/11 when the fear of flying gripped Americans and threatened the tourism sector – one of the pillars of the country’s economy. His defence of the Barbados dollar might have appeared like grass-roots economics, but the economy performed so well that unemployment reduced from over 20% in 1994 to 7% in 2007.

During that time the standard of living and the quality of life in Barbados have improved continuously and that country tops all the other Caribbean countries in the United Nations Human Development Index. For a small country with not a great amount of natural resources Barbados annoys its critics with the efficiency with which it operates, and significantly successive governments have managed to cultivate among Barbadians a consensus on national values and aspirations.

Legacy

The substantial progress made with the CSME is no doubt part of former Prime Minister Arthur’s legacy – removing restrictions on the movement of people, businesses and capital around the Caribbean. It is not the fault of Mr Arthur or President Jagdeo or indeed that hobby-horse Caricom that some of the region’s businesspersons are still reluctant to capitalize on the opportunities offered by the single market. The Trinidad business community has had no such reservations, and their operations are now evident across the region in several sectors, including finance and banking, (Republic Bank and RBTT), manufacturing and distribution (Trinidad Cement, Carib Beer, soft drinks, biscuits) and hospitality (Christian Mouttet and Issa Nicholas).

In the professions and services sector, there are a growing number of accountants and lawyers straddling borders, as are advertising agencies, architects and other service providers, and the Caribbean showed how it could perform as a unit in the hosting of Cricket World Cup 2007.

The CCJ

Perhaps the most important regional achievement of Mr Arthur, however, was to persuade his country and its legal profession to join the Caribbean Court of Justice, making it only the second country along with Guyana to make the regional court its highest court. The significance of that situation is underlined given that Barbados is perhaps the most pro-British member of Caricom and not many would have bet against cutting the ties with the Privy Council. Jamaica whose own Gleaner in 1901 (yes, 1901) had called for a regional court to replace the Privy Council, St Lucia under Dr Kenny Anthony and St Vincent under Dr Ralph Gonsalves are all yet to make that crucial commitment to the Caribbean and its jurisprudence.

The new man

Ironically, having campaigned on a platform for change, the new Prime Minister, David Thompson, may demonstrate a change of emphasis but hardly one of direction. Barbadians are notoriously conservative, and even when socialism was the wave of the Caribbean, that country regarded its socialists as a mere fringe element.

It is early days yet, and Mr Thompson will have to do some stocktaking before he can take any action.

He will be more fortunate than many politicians in other countries in that he is likely to find cash in the treasury, investors at the door and the expectations of a people who have placed their trust in him over a popular leader with an enviable record. It is hard to believe that Thompson’s party gave themselves more than a modest chance in the elections, and they may therefore have to do some quick thinking and planning before taking office on Monday.

Thompson has however signalled as his immediate priority the cost of living, an issue which challenges every Caribbean leader and which not too long ago brought his predecessor to Guyana along with counterparts from other countries with the objective of exploring ways to cut the cost of living. Very little has since been heard of that initiative and Thompson gave no hint whether he would pursue that option.

With an eye on the social conditions of his people Thompson has identified affordable housing and the improvement of health care and health facilities as some of his more immediate priorities.

It may therefore be some time before he turns his attention to Caricom affairs.

Brief honeymoon

His honeymoon may not be a bed of roses as the consequence of the slowdown in the US and other economies from which most of the country’s tourists come will pose quite a challenge. His party’s manifesto contained a pledge to cut taxes and further reduce unemployment and there is the expectation among Barbadians that these would be done within the first hundred days.

The towering image of Arthur overshadowed Thompson at home and most certainly in the region, whose writers must now be hunting for biographical information on the new leader and evidence of his views and commitment on regional issues.

Thompson does, however, have some political pedigree and he must know that Barbados and its economy have some synergy with the region which provides both visitors to and investments in his country.

Relationships, however, are a mutual affair and the more seasoned leaders would need to extend to Thompson the same kind of respect they accorded his predecessor. They will need to give him the space to find his place at his own pace and resist the temptation to tell him how to do his job.

With Arthur no longer at the head table, there is a huge responsibility and opportunity for President Jagdeo the other economist, who has responsibility in Caricom for agriculture with its implications for the cost of living. That should enable him to strike a resonating chord with Thompson.

At the time of writing, the main Trinidad newspapers had not shown any great interest in the Barbados elections, with neither of the major papers giving any front-page coverage to the results in its next day issue.

It is true that the results would have come in close to midnight, on Tuesday night, but are we serious when the region’s top selling newspapers use reports by the BBC and the Associated Press as their coverage?

Did our regional newspapers not consider the Barbados elections important or significant enough to send their reporters to cover the elections?