Tony Vieira's Comments
18 October 2017


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Reduction in Consumption Tax on Fuel
(Aired 5 September 2005)

   Recently I visited Leguan and was saddened to learn from the farmers I met that this was an island that was dying due to indifference by the government. I have a soft spot for anyone who tills the land, having been a farmer myself from 1964 to 1990; to this day I spend several hours a week in my garden. Once you love the land, it does not go away.

     The sea defences on the northern part of the Leguan has all but collapsed and the rice production on the island is in serious danger of collapsing due to the high price of fuel, the farmers just cannot afford to plough their lands because of the high cost of diesel, I was taken on a tour of the Island by some farmers and I discovered that of 7000 acres laid out and prepared for rice production only around 2000 acres have actually been ploughed and planted for the next crop. In other words the people of Leguan's economic activities [since this is a rice producing community] has declined by over 70 percent. How these people will survive the next few years is beyond me, also noteworthy is the fact that rice production around the country must be similarly affected since this high cost of fuel is not unique to Leguan, but being a closed community the data for the island is readily available, what is happening in Leguan may very well be representative of a nationwide phenomena.

   GINA the government propaganda machine does not tell us how many acres have been planted for this year's second crop as compared to the second crop of last year, they are too preoccupied taking us down memory lane, about PNC's rigged elections and showing us Mr. Jagdeo breaking the land's Constitution by going all over the place handing out money which is not his, almost all day they keep shining the PPP's meagre collection of brass and wood trophies, East Bank road completion etc., incidentally I have christened that road the "dig out and put back in road" anyone who passed this construction over the past 10 years will agree with me, one day we saw them putting in sand fill at some spot on the road and the next day we saw them digging it out!! We saw this hundreds of times ladies and gentlemen, not one or two times, this road took 10 years to complete and no one from GINA is telling us how much it was supposed to cost originally, and how much it ultimately ended up costing us and no one is telling us why it took 10 years to complete! That is what GINA is supposed to be doing, supplying us with information not telling us what a wonderful job the PPP is doing when we all know that they are doing a lousy job.

   So what is happening at Leguan i.e. the abandoning of over 70 percent of the island's rice lands can very well be happening everywhere in the country, we just don't know, and this close to elections the PPP is not about to tell us that their criminal neglect of the rice industry will cause Rice to go the way of the dinosaur, just as our sugar industry will.    But we have trade shows coming up to show what we are producing.

   All these Trade shows we keep having are just propaganda ladies and gentlemen, we have been holding them since 1992 and frankly the Bank of Guyana statistics do not show any indication that any product other than gold, Sugar, Rice, Bauxite, Fish, shrimp and lumber is worth considering as a proper contributor to our economy in our export activities. It is however clear that rice, sugar, bauxite and now gold are in serious trouble in this country so whilst we have been holding trade shows to show our fancy pepper sauce and other products our major industries have been collapsing. Think about it, it is ridiculous.    

    Ladies and gentlemen it is not that we do not have the will or the brainpower to develop other manufacturing industries but the price of electricity alone is a deterrent to our producing anything which can compete with the larger world, so trade shows are just another sham created by the PPP to delude you that we are going somewhere.

   Now if the Leguan phenomenon is reflective of the rest of the country then rice production will drop by between 50-70% in this year second crop.

   Recently the government has announced amid much fanfare that they are dropping the consumption taxes on gasoline and diesoline.

   For gasoline they have reduced the consumption tax price from 40% to 35 %, this means using the international average for the price of gas and a 10 million gallon a year usage for our cars, when this government sat down and calculated the revenue they will require from gasoline they calculated that they will collect 40% the price of fuel which was 74.4 cents a Gallon in January this year i.e a total revenue of 3.7 billion Guyana dollars.

   By August however the price of gasoline raised on international markets to $2.61cents per gallon; but from January to August 2005 the government continued to collect 40% consumption taxes on fuel notwithstanding that the price of fuel had skyrocketing from US$ 0.744 cents a gallon to US$ 2.61 per gallon today and is expected to reach 3-3.50 dollars a Gallon by year end if something is not done internationally, now this increase did not come all at one time from January to now, but it did increase dramatically in March 2005 so I am going to use an average price of US$2.28/Gal which is the international projection of what the average cost of fuel in 2005 will be, the consumption tax that will be paid by Guyanese this year will be 11.4 Billion instead of the 3.7 billion that the budget required. So whilst our government sat and watched and fiddled and did nothing we Guyanese are going to have to pay three times what the budget required us to pay as consumption taxes on Gasoline.

    Now let's work this backwards, the government wanted 3.7 billion in revenue from Gasoline this year so when they sat down to calculate the national revenue from Gasoline last August/September the price for gasoline was less than 1 dollar US per gallon but between then and now the price rose from 74 cents/gallon in January 2005 to US$2.61/gallon in August 2005 a 71 percent increase! The government has now announced that they are dropping the consumption tax on Gasoline by 12 percent! This is like putting a band aid plaster on an incision for open heart surgery or an even better analogy, it is like putting the PPP to manage the complex economy of a country.  

   Exactly the same thing happened in diesoline with regards to price, at the beginning of this year the price of diesoline was 72 cents a gallon and in August the price internationally was US$ 2.60/gallon.  

        Now I am not going to do the calculations for diesel as I did for gasoline but if the rice farmers are in trouble and are not able to afford to buy the fuel to plough their lands the fallout will be a lack of foreign exchange earnings for this year's second crop, why does the government not cap the money they collect from fuel as Jamaica does, of course when Patterson, the Jamaican PM, raised the price of fuel in Jamaica a few years ago 14 people died in the riots that followed. Capping of the fuel price means that if the budget calls for 3.7 billion in consumption taxes and the fuel price raises internationally then the consumption taxes must be reduced so that the government gets their 3.7 billion and not allow the fuel price to rise the way it has to the detriment of the nation's economy especially agriculture.

    We must to stand together as one people and demand good governance Ladies and Gentlemen this divide and rule nonsense has got to stop, or we will forever be doomed.

    Tonight I want to send a special hello to the people I met in Leguan, this country has the most wonderful, hospitable people anywhere ladies and gentlemen, it's such a pity that they allow themselves to be divided and used like this.