Oct 24, 2015 News
Billions of dollars in tax waivers granted annually by the previous administration to largely businesses and others were highly unsustainable for the country. It will not continue in such an uncontrolled manner under the current government,
promises President David Granger.
Granger said that the $63B in tax waivers quoted in the report of the Auditor General for 2014, was highly unacceptable.
The coalition Government is now mulling a number of options to ensure the wanton granting of tax exemptions do not continue.
One thing is clear- the volume of tax exemptions will be reduced drastically as applications on file are being closely scrutinized.
The Auditor General report, released on Thursday in the National Assembly, flagged the $63B in exemptions granted last year.
The Guyana Revenue Authority (GRA) did not maintain a Remissions Register which would have made it easier to scrutinize and justify the applications for the waivers.
The Office of the Auditor General in criticizing GRA, warned that the register must be maintained in the future.
Guyana’s budget in 2014 and this year stood at $221B. The $63B waived amounted to a staggering 28 percent. It would have been a hard pill to swallow for Guyanese who were suspicious of who exactly were benefiting from the exemptions.
With a number of sectors performing poorly and Guyana badly wanting every cent in revenues, the situation has been drawing anger.
In 2013, the waivers amounted to $55M. To compound matters, a special audit ordered into duty free concessions granted to remigrants on luxury vehicles found discrepancies, raising worrying questions about GRA’s monitoring.
There were investigations launched after remigrants reportedly sold off the vehicles, then returned to the US and other places, netting huge profits. Little has come out or has been announced of the investigations.
Consecutive remigrant scams have reportedly cost GRA hundreds of millions of dollars. The authority has the final say before waivers are allowed.
The biggest category of tax exemptions went to businesses and companies- some $41.5B.
Critics have accused the previous administrations of doling out the waivers without any assessment on what exactly what Guyana was benefitting.
Indeed, there were no proper explanations forthcoming from the Guyana Office for Investments (GOInvest) on what systems were used to assess the exemptions.
Indications were that ministries and other Government agencies recommended tax exemptions, in many cases bypassing GOInvest, the one-stop shop agency that was supposed to handle investments in Guyana.
Past news reports raised questions about the large number of waivers to especially foreign companies.
According to President Granger yesterday, his administration is very much aware of the problems.
“We have received reports. This is something we complained about when the APNU and the AFC were in the opposition. So it is not unanticipated (the findings of the Auditor General).”
Granger, however, was quick to point out that the coalition Government was not on a witch-hunt or interested in persecuting when it comes to fixing the problems of tax exemptions which have placed a huge burden on the economy.
He noted that when a waiver is granted, it may be born from corruption. However, good reasons may also exist.
The President is referring to the fact that Guyana has a number of incentives on the books for investors, both local and foreign. These include tax breaks and tax exemptions.
The administration would not be interested at this time on stopping the tax waivers altogether.
The official pointed to recent announcements he made that Food For The Poor, a major non-governmental organization (NGO), would be benefitting from exemptions.
That organization has built over 2,000 homes for poor families across the country and has been appealing for concessions from Government.
“Not something I can ignore. I give a commitment.”
As of now, Government will be examining all applications for tax waivers on a case-by-case basis.
“We intend to reduce the number of waivers. People have applied for waivers already and the Minister of Finance is going to make some recommendations.”
The President insisted that the current value of $63B is clearly “unsustainable”.
“If you have a policy, enforce the policy. If the policy is to grant favours to the organization or other categories of NGOs, let us put a schedule. If you go outside the schedule; no waivers.
That is how we intend to proceed.”
The President was clear on one thing…the figure stated in the Auditor General report of 2014 is unacceptable. The Ministry of Finance is fully aware of the ramifications on the country’s finances.
Jagdeo will make ayo sell ayo bodies to feed ya’ll pickney.
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