Members of the Guyana Gold and Diamond Miners Association are calling on the government to meet with them to discuss the new tax measures which the state wishes to implement as part of this year’s national budget.
On Friday the Association met with its membership and Chartered Accountant Christopher Ram, who tried to explain the measures to the miners.
The miners are now expected to adapt to changes being made to a tax system under which they had operated under for over 30 years. During the meeting, members said they are not averse to paying taxes.
But they believe that the peculiarities of their business were clearly not taken into consideration.
Under the new tax regime, certain goods and services will attract Value Added Tax; the tributors tax would be increased from 10 to 20 percent, and there will be a two percent tax on gross. Added to this, miners will be required to file their income taxes at the end of the year.
The tributors tax is taken from the money paid to those hired to work in the mines. The increase in this aspect is of great concern to the GGDMA, since in the past, their members have had difficulty explaining the 10 percent deduction to employees from their earnings.
Members said that on many occasions they have been accosted by staff for the deduction because their staff did not understand that the money must be deducted and given to the Guyana Revenue Authority.
One miner indicated that culturally it would be difficult to get the message of the increase over to the workers, since they are under the impression that the money is taken and kept by their employers.
Miners believe that they stand to lose their workers, who may leave to work for miners who will illegally choose to not apply the deduction. Another miner said that this cannot be prevented, since the employment arrangement is non-binding.
Additionally, there is tremendous concern regarding the two percent off the top charge on gross. Under the new regime this tax will remain but miners will be required to do their taxes to pay income tax.
The miners’ difficulty with this new measure is that a lot of the records which will be acceptable by the GRA are not easily attainable and, in some cases, impossible to get in the ‘bush’.
It was explained that when a miner hires an excavator operator to dig a pit or asks someone to drive a truck, those individuals would not have documentation readily available to record payments. This is further amplified since most miners are at their camps for months.
As a result, miners fear that their profits would be estimated wrongfully. One member said that if a miner knows his cost of production is 70 percent, then there will be a 30 percent profit on revenue.
He said that what can happen now is that GRA can disallow the receipts and the miner’s cost of production can be viewed at 40 percent and their profit seen as 60 percent of revenue, causing a person to be taxed on revenue they never earned.
This can result in miners becoming bankrupt and criminalised. The miners are calling on the GRA and government to put a hold on these new measures and meet with the stakeholders to understand how the industry works.
On Friday, Chartered Accountant Christopher Ram had intimated that he was more enlightened about the industry after being exposed to it at the emergency meeting.
Some of the miners have threatened to halt their operations until Government officials meet with them. Spare parts dealers and boat operators were among those who attended the recent meeting.
The mining industry has been one of Guyana’s main revenue earners. This year gold declarations reached a record high of 705,000 ounces, 440,000 of which came from local small and medium scale miners.
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