Guyana threatens to pull tax concessions from Malaysian logging firm

The Guyana government says it will pull the tax concessions granted to a Malaysian firm if it fails to restart operations after laying off more than 250 workers.

The workers were made redundant in October, following damage to a boiler at Barama Company Limited, which is engaged in a huge timber operation on the East Bank Demerara.

But president Bharrat Jagdeo, announcing a three-month assistance package for the dismissed workers, said he was not satisfied that the company is doing all it can to get its boilers operational again, and he has asked for an independent investigation since his administration is not happy with the timetable given by the company to restart operations.

"It seems as though it's a shifting timetable that's gone from 12 months now to 20 months and we have a sneaking suspicion that there's no sense of urgency to resume operations," said Jagdeo

"But let me make it clear, let me make it extremely clear that, if Barama thinks that they will just be cutting wood in Guyana and exporting that wood, and not resume the plywood operations, they have another think coming."

The president said that once he receives the report from the minister of agriculture he will invite the company for some "serious discussions", and if he is still dissatisfied with their efforts to resume operations in the 'near term', government actions would follow.

"They've enjoyed tremendous concessions from this country and from the Treasury, duty-free concessions, tax holidays, largely because we wanted the employment of our people. And, if there is not this large-scale employment, I don't see any justification for continuing any of those preferences," Jagdeo said.

Hike in prices

He said as a result of the situation, "unscrupulous people" have increased the price of a sheet of plywood from GUY$4,500 (US$22) to GUY$9,500 (US$46).

"So we'll have to import and I've said to my Cabinet we'll remove the taxes for the period while we're not producing. When we start producing, we'll put back the taxes on imported plywood so that local plywood will have a preference."

Jagdeo said that his government will provide a GUY$25,000 (US$125) monthly stipend and training for the 280 workers who were dismissed from the Malaysian company.

The President said while the government will be holding talks with Barama it would also be exploring the possibility of finding jobs within government agencies and the private sector for the workers.

- CMC