After a barrage of statements calling for the installed PPP government to follow the lead of the Government of Barbados and cut its petrol tax, the PPP has bent to the mounting pressure and decided to remove its 10% tax on fuel. This is according to a statement by Vice President Jagdeo.
The tax cut is now expected to reduce the cost of petrol by up to 10%. Recent cuts to VAT and other taxable goods has only served to prove the upward stickiness of prices, with cost to consumers continuing to rise in spite of tax cuts. Guyanese now hope that this tax cut does not only serve to further fill the pockets of gas station owners, as most recent tax cuts have done.
Over the past few months, the price of fuel has skyrocketed to almost 2x the 2021 average price of $70 BBL (barrel of crude oil). The price now stands at $121 BBL. With Guyana’s fuel tax being tied to the price of petrol, as price went up so did the amount of tax Guyanese had to pay at the pump. This has been the cause of much distress and anger as Guyanese demanded that the government remove the taxes that were only adding to their economic difficulty.
With calls for the tax cut beginning to build momentum, the installed PPP government has finally decided to bend to the demands of the public. This example of lobbying success shows the value of public participation in the process of government.
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