Latest update April 19th, 2024 12:59 AM
Feb 08, 2016 Features / Columnists, Peeping Tom
One of the issues that will not surface during the parliamentary debates on the National Budget which is due to begin today in the National Assembly is the thorny subject of tax concessions offered to re-migrants.
It is not going to be raised because on both sides of the House there is support for the measure.
The PPP despite the many instances of corruption involving this concession, failed to abolish it. The new APNU+AFC administration has continued to keep the concession on the books.
Instead of abolishing it, the new government is planning to reorganize its administration.
The Ministry of Foreign Affairs has indicated its interest in outsourcing to another Ministry, the administration of duty free concessions to re-migrants. This is half measure; transferring the problem to another Ministry does not make the system less corrupt.
Ideally, of course Foreign Service Officers should not have to be detained with the processing of applications for concessions. It exposes them to all types of unnecessary hassle because the concessions have been abused from since they were introduced in the 1970’s by the Peoples National Congress (PNC) government.
There are far too many people in this country who are dishonest and greedy and they look for loopholes in the law to exploit. They are encouraged to do so because tax rates are prohibitively high in Guyana. If the taxes on motor vehicles were low, it would have acted as a disincentive for persons to cheat on the system.
The system became so fraught with corruption that the PNC under Hoyte eventually abolished it. The PPP unwisely reintroduced it on the basis that measures were needed to encourage skilled Guyanese to return home.
There must be a better way to encourage these nationals. That way has to be the payment of better salaries and greater security in the country.
A person living overseas is returning home to take up a senior appointment. Other persons who support the government have returned home and taken up big jobs. They would have come regardless of the concession offered. It is not as if these persons are ever going to give up their foreign citizenship.
The re-migration concession has been abused thoroughly to allow luxury vehicles to be imported in Guyana in the name of re-migrants but really intended for use of locals. It is too great a burden on the tax administrators to have to monitor this system and therefore the abuses are hard to immediately identify. By the time they are identified, prosecution becomes a problem.
Under the Peoples Progressive Party government it was reported that more than fifty bogus duty free letters were signed by one official. Charges were laid against some junior clerks within the Ministry of Foreign Affairs and the Ministry of Finance but the case seems to have been eviscerated because nothing was ever heard.
The new administration does not seem interested in investigating this scandal. They also strangely do not seem interested is abolishing this scheme as the PNC had done under Desmond Hoyte.
It does not require tax reform for the government to make amendments to the tax system. The government has already begun to make amendments to the various pieces of tax legislation without awaiting the report of the committee on tax reform.
There was therefore no reason why the government should not, as one of the measures to reduce corruption and improve tax collection, abolish concessions to re-migrants.
There is no evidence that this measure, which has been in place for over twenty three years, has eased the skills shortage in the country. There is no evidence that hundreds of skilled persons have returned as a result of the encouragement offered by the concessions.
The government should abolish the concession or at least abolish the concession on motor vehicles which is where most of the suspected fraud in taking place. The government however continues to keep the concession in place and has extended it to cover Foreign Service staff who have been working overseas. There was no need for this.
The staff should have simply been told to sell their vehicles when they are ready to return home and buy one when they come to Guyana. This will avoid having on the law books a concession that encourages corruption.
Where is the BETTER MANAGEMENT/RENEGOTIATION OF THE OIL CONTRACTS you promised Jagdeo?
Apr 19, 2024
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