It appears that Guyana Stores Limited (GSL) is not the only company that will soon be coughing up billions of dollars in owed taxes.
According to GRA Commissioner General, Godfrey Statia, more than 20 large companies have taken note of the fact that the tax authority has been able to win more than $3B from GSL in taxes owed and as such, are looking to come forward for negotiations.
The Commissioner General said, “Taxes belong to the State and if they are not paid, then there are various forms of redress you can seek. You can go straight and seize the property.
The revenue authority has a first lead and is first in line to all the creditors… so you can go and seize property but you don’t want to do that.”
“You would want to ensure that the business stays in place so it can pay the taxes. So seizure of property should be a last resort. It is better to have a negotiation as to settlement and a timeline for it. But don’t forget, in negotiations you want to see effort…”
The Tax Chief added, “The problem with Guyana Stores is not an isolated one. There are many companies, which have found themselves in a similar position. Many of them would have been affected and I’d be writing to those companies. There are some large companies included in the lot.”
Statia said that there are several companies in Guyana, which have sought to go to court instead of following the steps outlined in the law, as it relates to tax payments. He is elated that there appears to be a change of behaviour in this regard.
THE GUYANA STORES MATTER
The appeal of the Guyana Revenue Authority against GSL was before the Caribbean Court of Justice (CCJ) for some time now.
The matter involved a constitutional challenge to the two percent minimum Corporation Tax under the Fiscal Enactments (Amendment) Acts. No. 16 of 1994 and 3 of 1996.
The company had received a demand dated May 2012 from the Commissioner General of GRA for the sum of $3,811,346,397.
GSL instituted proceedings in the courts of Guyana, and the matter was subsequently appealed to the CCJ after rulings in favour of GRA.
The CCJ has ruled that the minimum Corporation Tax as enacted by the National Assembly was not a forced loan, as argued by the company.
“The court has upheld the GRA’s submissions that the minimum corporation tax is constitutionally valid. The CCJ also ruled that the company should not be permitted to invoke the constitutional jurisdiction of the courts by arguing that an alleged misapplication of a law is unconstitutional.
The CCJ stated that the Income Tax Act provides a specialised procedure for challenging assessments and the company ought to have utilised that procedure.”
GRA, in a statement, said that the decision is a victory for the authorities as many taxpayers attempt to avoid the specialised procedure under the Act in order to delay and evade the payment of tax.
GRA was represented by attorneys-at-law, Ronald Burch-Smith, Mark Waldron and Keoma Griffith.
Kim Kyte-Thomas, Oneka Archer-Caulder and Judy Stuart-Adonis represented the Attorney General of Guyana. Attorney-at-law Stephen Fraser appeared for GSL.
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