Latest update May 10th, 2024 12:59 AM
Nov 08, 2017 News
By Kiana Wilburg
The Guyana Revenue Authority (GRA) is of the firm view that Auditor General (AG), Deodat Sharma, has not been accurate in his 2016 report, especially as it relates to his tax exemptions findings.
In his report, Sharma said that in accordance with the Investment Act of 2004, a procedural audit of the incentives granted to an investor or an investment enterprise is required to be carried out annually by the Auditor General.
However, no records or documentations were submitted to facilitate these audits, Sharma stated.
But GRA’s Commissioner General, Godfrey Statia, explaining why the entity failed to present the relevant records to aid the said audit, made it clear to this newspaper that those records were never requested in the first place.
Statia explained that at the end of an audit, the Auditor General or the Auditor sends a draft of their report to the respective agencies so that comments can be provided in relation to findings.
The tax chief said, “This was done in our case. All the issues the Auditor General pointed out to us were adequately answered. As to the article that appeared in the Kaieteur News that we did not provide records, those records were available as I have shown you. The Auditor General only needed to ask for them.”
The GRA Commissioner General continued, “In his draft report which he sent to us, he never mentioned that GRA did not submit these records to facilitate the audit he spoke of in his final report.
“I would like him (Sharma) to prove to me that he requested these records and never got them…”
“Unfortunately, he is not a member of the accounting profession or else he would have been taken over the coals about it. But if he holds the office of Auditor General he should at least be straight forward about the final language agreed on in the preliminary document.”
Statia is of the view that the Auditor General withheld the truth and he, Statia, is therefore, left with no other choice but to question the real reason and purpose for the Auditor General acting in such a manner.
Statia said, “I was one of the Auditor General’s lecturers at the University of Guyana and I never taught him dishonesty so I hope he has not acquired it over the years.”
TAX EXEMPTIONS
In his latest report, Sharma noted that tax exemptions granted to companies were equivalent to 54 percent or $30.287B of the total exemptions granted for the year 2016. Sharma said that total exemptions came up to $56.073B.
The Auditor General noted, however, that the total value of tax exemptions granted in respect of Investment Agreements facilitated through the Guyana Office for Investment and the Guyana Geology and Mines Commission could not have been determined.
In this regard, he pointed out that a review of the records of the Authority revealed that 59 agreements in respect of 41 investors were approved during 2016.
GRA in response said that the categories of tax exemptions in the report are those that were built into the system several years ago and are subject to limitations. Nevertheless, it said that the IT Division is in the process of implementing a system that will facilitate a breakdown of the Companies/Businesses’ category so that more informative reports can be generated.
The Audit Office recommended that the tax agency submit for audit, the reports once available.
Be that as it may, Sharma noted that exemptions from duties and taxes totaled $56.073 billion for the period under review, as compared to $92.425 billion in 2015. He said that this represents a decrease of $36.352 billion over the corresponding period.
Notwithstanding this, Sharma said that the value of revenue foregone for the year 2016 represents 36.89% of actual revenue collections by the Authority. In addition, tax exemptions of $26.399 billion granted in respect of Customs and Trade Taxes exceeded actual collections by $10.017 billion.
Furthermore, Sharma pointed out that Unconditional Tax Exemptions reflected an increase of 76% equivalent to $6.628 billion.
Kaieteur News asked the Commissioner General to expound on this matter.
The tax chief said, “Sharma should have explained what an Unconditional Tax Exemption is, in his report. These have to do with trade agreements. It would go up once trade improves or increases with our CARICOM neighbours…If he had requested a copy of this he would have gotten it along with the rationale behind it.”
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