The Guyana Revenue Authority (GRA) has been advised that it has no authority to take it upon itself to unilaterally increase the engine size (cubic capacity) on vehicles granted to public servants via tax exemptions.
In a letter dated last week Tuesday, June 6, to Commissioner-General Godfrey Statia, the Department of Public Service, warned that it has to first authorize any increase in the ‘cc’ before GRA can act.
The tax collection authority has come under the spotlight with a transaction involving a senior official and a vehicle he brought in.
Late last year, Customs’ head, Lancelot Wills, applied to the Department asking for a tax exemption on Toyota Harrier- its engine was over 2300cc.
However, the department refused the request, noting that Wills was only entitled to a vehicle that had an engine capacity of up to 2000cc.(2 Litres)
Additionally, it was pointed out that the vehicle was over the 8-year-old limit that was introduced last year as a measure to ensure Guyana does not become a dumping ground for older vehicles.
Despite the vehicle being rejected for a tax exemption, GRA went ahead in January and registered it. It appeared that Wills was allowed to pay a 10 percent rate- equivalent to what remigrants would be asked to pay. There were attempts, almost three months later, to correct the situation.
Statia, explained last week, that only two officials at GRA- himself and his deputy, Hema Khan- are entitled to unlimited engine sizes. He has made applications for the Customs head and the head of the Law Enforcement and Investigations Department to also receive unlimited because of the nature of their field work.
In April, attempts were made to correct the transaction with Wills who was asked to pay an additional $1.7M, in addition to the $180,000-plus he had paid in January to clear the vehicle. He was given a payment plan. Statia last week admitted that a mistake had been made.
The transaction was described as irregular but GRA insisted that it had the flexibility to grant its employees certain allowances.
In late April, Statia wrote the Department of Public Service asking for a “Review of Procedures on Issuance of Department of Public Service Recommendation for Tax Exemptions on Motor Vehicles- Public Officers/Officials”.
In his response, Permanent Secretary, Reginald Brotherson, indicated that the department has no objections to granting another approval for a different year and model.
But these would have to fall within the law.
Brotherson also addressed the issue of GRA’s defence of granting permission to Wills for an engine size that is above the 2000cc limit.
Legal minds have disagreed with GRA on its position, pointing out that the tax agency has little leeway when it comes to tax exemptions.
In addition to the Department of Public Service, there are other agencies including the Guyana Geology and Mines Commission and ministries which have to first screen and issue tax exemption letters first.
GRA’s job, it was pointed out, is merely to ensure that the tax exemptions were issued in accordance to the law. GRA has no power to grant those waivers.
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