Latest update March 28th, 2024 12:59 AM
Mar 15, 2019 News
The Inter-American Development Bank (IDB) believes that there is room for Guyana’s tax system to become less cumbersome, less complex, and more efficient along with improvements in tax administration that can reduce noncompliance by local businesses.
It made this known in one of its reports titled, “Strengthening Guyana’s Fiscal Framework in Anticipation of an Oil Boom.” It was prepared for the Bank by Jeetendra Khadan and Sasha Baxter.
In that report, the IDB said that tax administration is currently hampered by relatively low capacity of the Guyana Revenue Administration (GRA), with inadequately skilled human resources, limited use of information and communication technology (ICT), and inadequate use of technology to capture common and relevant information.
Moreover, the IDB said that tax administration shows up as a major constraint for Guyanese firms. To pay taxes, the Bank noted that firms must spend 256 hours and make 35 payments annually compared to 195 hours and 25 payments annually by firms in the Rest Of Small Economies (ROSE).
In addition, the Bank said that the Ease of Doing Business index shows that profit tax (percent) in Guyana is much higher than the average for the ROSE: 21.3 percent compared to 14.3 percent. Nonetheless, the Bank said that Guyana has a better ranking than ROSE in labour tax and contribution, other taxes, and total tax rate (percent of profit).
Notwithstanding these challenges, the IDB said that the country has benefitted from advisory services from the Caribbean Regional Technical Assistance Centre (CARTAC) and has seen vast improvements post-global financial crisis (GFC).
It said, “The semi-autonomous organization, Guyana Revenue Authority, has benefitted from successive reforms and training to strengthen its organization, functionality, and efficiency. However, despite years of reform, tax compliance is still relatively low.”
It added, “For example, the on-time VAT filing rate is 43 percent compared to the regional average of 62 percent and below international standards of between 70–90 percent (IMF, 2017).”
On a positive note, the financial institution said that Guyana is adopting policies to broaden its tax base and reduce noncompliance. It said that the introduction of the VAT in 2007 greatly widened the tax base and increased revenues, capturing businesses that previously were noncompliant or were in the informal sector.
Further to this, the IDB said that the mandatory use of the Taxpayer Identification Number (TIN) has increased the number of taxpayers and encouraged people previously in the informal sector to come under the tax authority. It said that the reforms undertaken in 2017 are expected to strengthen VAT tax compliance with a reduction in the tax rate.
THIS IDIOT TELLING GUYANA WE HAVE NO SAY IN THE 50% PROFIT SHARING AGREEMENT WE HAVE WITH EXXON.
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