Jan 25, 2016 News
Initial assessments of the country’s tax systems by the new Board of Directors for the Guyana Revenue Authority (GRA) continue to throw up a number of startling findings.
On Friday, Rawle Lucas, Chairman of the GRA Board, disclosed that agriculture and mining appeared to be the worse of the four sectors assessed, when it comes to determining the biggest earners.
The official spoke of the issue Friday during a press conference at GRA’s Headquarters on Camp Street.
Since taking office in May last year following early General Elections, the David Granger administration has appointed a new Board with a number of reforms underway for Guyana’s tax systems.
There have been growing complaints that GRA is not doing enough to raise its tax collection.
According to Lucas, the GRA Board has been studying a number of ways to improve its understanding of the tax data it has available. The intention is to come up with ways to ensure more compliance from taxpayers.
Insisting that the methods used in the assessments were not the best and need obvious refinement, Lucas disclosed that the data was broken down by four economic sectors.
These include Agriculture, Fisheries and Forestry; Mining and Quarrying; Manufacturing and lastly, Services.
“We attempted to mimic the national accounting framework to see which sectors of the economy are contributing positively to the revenues,” the official explained. “But even with what we have at the moment, we can draw some preliminary conclusions.”
Services, from the initial assessment, represents the largest sector, contributing some 66 percent of tax revenue.
Manufacturing came next with 30 percent.
The remaining four percent was divided up between Agriculture, Fisheries and Forestry, and the Mining and Quarrying sectors.
“It stands to reason that we have tax problems in the Agriculture, Fisheries and Forestry and the Mining and Quarrying sectors,” the Chairman said.
Earlier this month, Lucas made it clear that the country’s tax system is distorted and is in urgent need of refining.
He said that a recent review of a number of areas in the country, looking at economic data between 2006-2014 utilized figures from GRA, from the Bank of Guyana, on imports as well as spending. There were immediate questions raised, based on the figures, on how the country managed to spend so much with so little money.
The exercise was conducted for areas including Corriverton, New Amsterdam, Ogle, Linden, Bartica, Parika, Lethem and Anna Regina.
It appeared that revenue leaked through all of GRA’s tax structures, with huge concerns over the losses in Income Tax, Property Tax and Value-Added Tax.
GRA decided to disaggregate its revenue base with some attention to the economic centres.
Lucas said that one would have thought that areas like Corriverton, in Region Six, with its multi- cultural economy, would have been making a larger contribution than the $1.3B. A depressed area like Linden, Region Ten, managed to rake in $1.1B in revenues on a much narrower economic base, the Chairman disclosed.
The worrying thing of those economic centers is the fact that the places only contributed an estimated two percent of the country’s revenues.
“This is as much a surprise to me as to others,” Lucas said.
He said that one is surprised, too, that areas like Anna Regina and Bartica cannot do as well or even better than New Amsterdam.
GRA had been under the microscope for a number of years over its revenue collections, corruption, investigations of possible fraud into duty free concessions and the leaking of confidential tax information.
On Thursday, GRA fired Commissioner-General Khurshid Sattaur, for allegedly leaking information, among other things.
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