Speeches in the National Assembly

CUSTOMS (AMENDMENT) BILL 2013 – Bill No. 2/2013
Mr. Nadir: Thank you, Mdm. Deputy Speaker. I rise to give support to the Customs Amendment Bill that is before us at this time. We have been hearing of the arguments why we need to pass this bill at this time and we heard the criticisms and one of the criticism against our measure to pass this bill today was that we have put this on a fast track because of obligations and possible penalties. This is far from the truth as the Hon. Member... Let me congratulate her for not only the eloquence with which she delivered her contributions to this debate but also in the historic facts which she brought out in this debate and that is the Hon. Member, Minister of Foreign Affairs, Mrs. Carolyn Rodrigues-Birkett. She reminded us that we first introduced the environmental tax in 1995 so this bill is coming after almost 18 years of us having this tax and I have been around a little while and know the number of battles that we have fought, especially on behalf of our local manufacturers so that we have lasted 18 years with this tax. 18 years of the consumers of Guyana paying $10 for these containers, offering 18 years of protection and giving 18 years of time for our local private sector to become even more competitive in terms of the packaging of beverages. For this bill, introduced almost five months ago, we were told, the Hon. Minister of Finance sought deferral. Yes, he stood up and sought deferrals, why? Because Members of the Opposition, in the consultation that we had with them, had asked him to defer the bill and every time he stood up he did mention that it was “at the request of the Opposition” that he has been asking for this bill to be deferred. The Hon. Member, Mrs. Rodrigues-Birkett, mentioned the Revised Treaty, Article 90, speaking of no discrimination between the imported goods that will fall under this regime and the local goods. We had signed on to the Treaty of Chaguaramus so long ago, as I have said over and over again, Guyana, Antigua and Barbados under the “three Bs” – Barrow, Bird and Burnham – after the collapse of the West Indian Federation introduced Caribbean Free Trade Association (CARIFTA), the forerunner to this common market that we have under CARICOM so we have some obligations. Over the last 18 years many countries in the region use this tax in a discriminatory way. Guyana was not the only country but especially over the last five or six years as the Hon. Member, our Attorney General, mentioned there has been concerted effort for all of the countries in CARICOM to put their business in order and at the highest level last year we were told by the Hon. Member – and it needs repeating – Minister of Foreign Affairs, that the heads of government have committed to ensure that this tax would no longer be applied in a discriminatory way when it comes to CARICOM producers, local to Guyana or regional to CARICOM. Guyana now remains the only country... All of the excuses that we have been using on behalf of our local manufacturers to delay such an amendment have now run out, as of last year in fact, and St. Lucia being the last country to bring their laws in conformity with Article 90 of the Revised Treaty of Chaguaramus which was, as the Minister told us, sometime in 2005... Was it Minister?
This is not an issue where this Government is not engaging in consultations. The Opposition asked for consultations, they had their consultations and for me this is not a case where the Opposition is asking for a month’s delay so that we can pass this bill with unanimity. In fact, listening to the Hon. Member, Mr. Khemraj Ramjattan, and he said it, he is opposing the tax. He wants an amendment to remove it out of the Customs Act; to remove it all together. I must remind Members that the tide raises and lowers all ships so whether we remove it totally every producer, be it Guyanese or regional, will be at the same level but we have a challenge in that the $1 billion in revenue that comes now to help with so many things, including the cleanup of the environment we will have to find other means of raising. We will have to find other means. Does this mean that the VAT will go up to 16.5%? We have been hearing since the budget the Opposition calling for us to cut taxes, cut revenue measures, and at the same time increase expenditure. That could only happen if we have a deficit that will balloon every year. I know the ramifications of that. We have been down that road before. Some people are going to say that we can use National Industrial and Commercial Investments Limited (NICIL)’s money or that we can use Guyana Geology and Mines Commission (GGMC). There are some resources called working capital. One does not touch it. One continues to let it work so that one can take the returns from that and live off of that. It is like the person who feels that every day, when he works the minibus and he brings home $8,000 he can spend all of it. No. He literally would eat out the bus. If we touch certain revenues of this country we are going to eat out the productive capital of our country.
This issue of us wanting to ensure that we come in compliance with our treaty is not fast tracking, it is coming at the end of 18 years of protection that this People’s Progressive Party/Civic (PPP/C) Government has offered Guyanese manufacturers; 18 years. It cannot be denied.
Even externally we heard this same argument when the banana protocol was being established and the European Union gave the banana exporting countries of the Caribbean a time line was to get their houses in order. The same thing we face with sugar, but we had 18 years.
Significantly not contained under this tax are cardboard containers. It is biodegradable has the Hon. Member, Mr. Greenidge, spoke to the issue of measures that can encourage us to use biodegradable material. Cardboard containers are biodegradable but here one has no taxes charged on containers that are returnable and it is a clear measure that we are saying to our manufacturers locally and also overseas that if one can put one’s products in containers that are reusable then one would not pay the tax and the environment would be better off in the end. We have basically two big manufacturers in Guyana that this would have a small impact on; two of them. I will tell you today that the return price for an empty glass bottle from some of those manufacturers are as much as $40 per bottle; eight times what this tax is and that programme works to some extent. This amendment is saying to our producers “find ways that you can use returnable containers and that have that programme”. I and the Hon. Member, Mr. Greenidge, I think, share the same view in terms of letter the market encourage our producers to do the things that are right and that is particularly what is happening here with this tax. The tax is being lowered from $10 on the containers that come into Guyana to $5 on all containers coming in or used locally. The consumers will be paying $5 less in particular; $5 on half of the imports. 51% of the containers used, as the Hon. Member Mrs. Rodrigues-Birkett mentioned, are on the imports so half of the containers used will attract $5. Our local producers will pay $5 on the containers that are not returnable and we have the issue of dealing with the $1 billion in revenue if we have to eliminate this altogether. We cannot continue to say ‘other countries are breaching this area, that area, that area and that gives us license to do our own thing’. It is either we decide that we are going to be part of the common market or look elsewhere for another relationship or we come in conformity of the rules under the Treaty of Chaguaramus and we have been working assiduously at that; assiduously at coming in conformity. While many of us may talk about the slow pace of CARICOM and the integration movement none of us will agree that it is time to do away with CARICOM.
Today, versus ten years ago has the difference of a sanctioning mechanism in the CCJ. What we are doing is exposing all Guyanese, all of our people, to the fines a nation will have to pay should we get verdicts against us and penalties imposed upon us. The country would have to pay to protect a few persons. This thing looks very innocuous but the implications are so enormous and most significant. We are Suriname are the only contiguous countries in CARICOM in spite of the fact we probably touch somewhere in the lower parts of our countries, but I could remember that the Surinamese Minister – Mrs. Rodrigues-Birkett can bear me out – was threatening to impose a tax on Guyanese imports to Suriname in response to this measure that we have. Remember that one of their largest producers of beverages, Rudisa, sells 21% of the beverages consumed in Guyana today. Sorry, 21% of the imports of those beverages come from a Surinamese manufacturer so this has implications and I am in no doubt whatsoever that Suriname will seek to introduce countervailing measures against us if a bill like this is not approved by this Parliament. We are facing that also but at what cost? The cost is not going to be borne, not by the few beverage manufacturers... I think that the Minister of Health and the Minister of Sport have been telling us to use less sugar and more water. At what cost? It is a cost that the entire nation has to bare and is already paying because of all these defences.
The answer lies, for our manufacturers, in the ensuring that we can get together with Government, the law makers, and have concerted effort, as Minister Rodrigues-Birkett said, to find legal mechanisms to cushion these effects and I do not doubt that with all of the brilliant lawyers... The Speaker himself, after a particular debate in the House, was prepared to grant silk to quite a few Members in the House. I do not doubt that if we are saying... Trinidad provides 51% of these imports. ...take Trinidad’s Government to court on the issue of subsidised fuel. This is a powerful argument that one cannot discriminate against a local producer versus a regional one in terms of taxes. At the same time one also cannot subsidise ones local producers to the detriment of another regional producer and there is a very good case, I feel – we may not win it – that could be made out that the fuel which Trinidad’s and Suriname’s, use for power, manufacturers get at a subsidised cost ought to be increased because it is an uneven playing field and there are so many other precedents that are around in terms of WTO, especially, and the European Union that deals with these issues. This is not rocket science arguments. These are arguments that have come up in many common markets, custom unions, free trade areas. Minister Rodrigues-Birkett is so right in saying that our best defence is a good offence by looking to ensure that there are legal mechanisms which we can employ so that we can give our local producers a comparative advantage when we have to deal with other producers that get subsidies from their governments.
The Bill, while very simple, has all of these implications for our relationship with CARICOM, our trade because Guyana has a trade surplus with the Caribbean and this is a small measure that can bring penalties on Guyana that will reciprocated that other countries will try to use; maybe not these kinds of barriers but other nontariff barriers to trade in order to slow down Guyana’s export to the region and all of our people... Guyana’s rice to Jamaica, as an example, our fruits to Barbados and that was a task in response to all of this. At one time the Barbadian officers used to have to the packaging centre here for every shipment and we had to carry the cost. Minister Rohee went through that argument for years. We had to carry the cost. Our rice in Jamaica was turned back at the port of entry for all kinds of reasons. It took Minister Rohee years to establish an agreement with the Jamaica Bureau of Standards, licensing our National Bureau of Standards here to certify the rice when it reaches and one it reaches to Jamaica it is accepted.
They have enormous implications and while it might not be a tax penalty, the nontariff barriers that could be imposed upon us could equally stifle our exports to the Caribbean. The common market has taken a long time to reach where it is today and on the environmental tax, in particular, for 18 years many countries had it but we have all agreed that it will be eliminated.
We have looked at the sensitivity analysis with respect to price and it might... Every single analysis has a flaw here or there. I am not unaware of the ingenuity of our own local producers and I am confident that there would be a positive response by industry to this measure and we have seen industry respond in the face of claims of dirty beer bottles, dirty containers, too much liquid. We have seen our producers here go to cans, recyclable tins. We have seen smaller beverage bottles. We have seen them retooling. Recently one of our local producers put up external fermentation tanks to increase the throughput of the factory by moving from indoor – because the technology has changed – to outdoor fermentation tanks. I do not doubt that these innovative measures are going to be employed by industry in order to countervail the effect of this $5 on the local producers. It is always going to be “not yet”, “yes but” so the “yes buters” and the “not yeters” today I am asking to just, even if they do not want to say “yes”, say “sigh” because this is something Guyana needs to do now. After 18 long years of delay, of excuses, we have reached to the end of the rope and we need to do this now. I implore the National Assembly to pass this amendment which has been introduced over the past five months. Thank you very much. [Applause]