Nov 29, 2017 News
– Menu of reforms in the pipeline to improve tax system
The prudent management systems of the Guyana Revenue Authority (GRA) have placed the agency in a position to comfortably collect $4.7B more than it did last year.
This was revealed by Finance Minister, Winston Jordan during his budget 2018 speech on Monday.
The Finance Minister said that GRA is projected to remit $47 billion for 2017, up from $42.3 billion in 2016. Jordan explained that this is on account of increased remissions to companies and business, by $4.7 billion or 15.4 percent; ministries and government departments, by $0.9 billion or 21.2 percent; and foreign-funded projects, by $0.6 billion or 39.4 percent.
Furthermore, in anticipation of the economic developments expected in the next few years, Jordan said that Guyana’s capacity for effective tax administration must be brought up to par. He said that such a move is necessary if Guyana is to continue to be fiscally responsible.
With the aim of strategically bolstering the capacity of the GRA, Jordan said that a five-year strategic plan will be developed, in 2018, which will prioritize actions to be taken by the Authority to maximize Government revenue and improve the overall administration of taxes.
In 2017, the Finance Minister said that Government requested a Tax Administration Diagnostic Assessment Tool to assess the effectiveness of the tax administration system. He said that the findings of the report indicate that there is much work to be done.
Jordan said that one recommendation from this report has led to the establishment of a Large Taxpayers Unit, in light of the fact that the majority of revenues are collected from a small group of taxpayers. The operationalization of the Unit is expected to improve service delivery, thereby increasing compliance and revenue collection. It is anticipated that, in 2018, the Unit will improve its operational capacity to service all 243 large taxpayers on its roll.
Jordan said that the Government is not only working to improve the service delivery to large taxpayers, but, also, to all others. Jordan said that in 2017, the GRA established an outpost in Morawhanna, which reduced revenue leakage that was due to fuel smuggling.
Additionally, offices have been established in Charity and Parika, which offer a level of service similar to that of the Head Office. In the coming year, Jordan said that the Authority will seek to establish additional offices in Mabaruma and Eteringbang.
The Finance Minister said that another initiative, which Government anticipates will result in improved tax compliance, is the implementation of a stamp system for the sale of alcohol and tobacco. Through the use of seals to signal customs compliance, Jordan said that this measure will help, also, to reduce the incidence of smuggling of these particular goods.
The Finance Minister said that efforts will continue to focus on improving the internal capacities of the GRA to better serve the taxpayer. He said that the GRA e-services are currently being tested for tax returns processing, and taxpayer registration.
Jordan said, “We anticipate that these e-services will be launched in time for at least the average taxpayer to file his or her tax return online by April 30th, 2018. In addition, in the New Year, we will begin testing the Automated System for Customs Data (ASYCUDA), an integrated customs management system.”
The economist continued, “We will launch the testing of the manifest module of ASYCUDA with a private sector company, which will allow for advance filing of cargo declarations. This is intended to improve customs processing times and accelerate the clearance and release of shipments to taxpayers. By the end of 2018, it is expected that this module of ASYCUDA should go live.”
He added, “From 2018, emphasis will be placed on refocusing and strengthening risk management, the re-establishment of a business information technology steering group, implementing a data warehouse, rapid cleansing of the taxpayer register, and developing and implementing a risk-based debt management strategy.”
The Finance Minister said that all of these reforms are intended to stabilize the tax base, allowing for more predictability with regards to revenue streams, and more evidenced-based planning and forecasting.
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