Govt.’s decision to retroactively implement excise tax increase on re-migrants must be challenged in Court – Nigel Hughes

Aug 08, 2024 Court Stories, Features / Columnists, News

Kaieteur News – A move taken by the Government to retroactively implement excise tax increase on re-migrants is likely to attract legal proceedings.

AFC Leader and Attorney-at-law, Nigel Hughes

This is according to Leader of the Alliance for Change (AFC) and Attorney-at-law, Nigel Hughes. Hughes was at the time responding to information published in the Official Gazette on July 30, 2024 which revealed that the Guyana Revenue Authority (GRA)’s Excise Tax (Amendment) Regulations 2024 that details the increase in taxes for re-migrants was being imposed retroactively by virtue of the order which stated that the amendments shall be deemed to come into operation on September 1, 2023.

The order signed by Senior Minister in the office of the President with the Responsibility for Finance and the Public Service, Dr. Ashni Singh was published in the gazette less than 48 hours after Chief Justice Roxane George-Wiltshire handed down a ruling declaring the 30 percent imposition in excise tax for re-migrants was illegal. As such, the AFC leader said the decision by the government to have the amended regulations on excise taxes be deemed operational retroactively “has wide reaching effects and must be challenged in court.” “We can’t have a Minister or government making these decisions to retroactively impose regulations…because if you look at it, you can tell it was done in bad faith as a counter to the chief justice’s ruling that is problematic in itself…The AFC does not and will not support such actions and we believe that this must be challenged in Court,” Hughes said an invited comment with this newspaper.

Last week, the Chief Justice granted an order declaring that the GRA’s imposition of excise tax at the rate of 30% was illegal. Since July 2023, the GRA raised the taxes payable by re-migrants from 10% to 30% on vehicles with engines larger than 3,000cc.  On 8th April, 2024, the Commissioner General of the GRA, Godfrey Statia, wrote Aditya Basdeo that he was given duty free concessions as a re-migrant.

However, Mr. Statia required that Basdeo pay 30% excise tax on his new generation 2023 Toyota Landcruiser vehicle. Mr. Basdeo took issue with this and caused his attorney to write the GRA on 15th April 2024 explaining that there was a problem because the correct and proper excise tax rate was 10%. In Basdeo’s case, the 10% was equivalent to over $1,500,000 but the GRA was insisting that he pays nearly $4,600,000 – a difference of $3,100,000 in taxes.

When the matter came up for hearing before Chief Justice George Wiltshire, counsel for the GRA, Ms. Nicklin Belgrave, reported that the GRA made a mistake because they realised that the Minister of Finance had merely signed the regulations of July 2023 but the regulations were not duly brought into force by being published in the Official Gazette or being tabled in the National Assembly. In other words, the GRA had been wrongfully and illegally charging 30% taxes to re-migrants and collecting those taxes without any authority.

The Chief Justice granted all of the orders paid for by Mr. Basdeo through his attorney, Siand Dhurjon. She declared that the GRA’s policy of requiring 30% excise taxes was unlawful and she granted an order of certiorari quashing Statia’s assessment of 30% excise taxes. The Judge also granted an order of mandamus to compel the GRA to apply the correct excise tax of 10%. The Judge granted an order that Basdeo’s 2023 Landcruiser must be released to him forthwith upon payment of the correct excise taxes.

Basdeo’s Landcruiser came into Guyana on 28th June 2024 and has been on the wharf racking up storage costs ever since. The Chief Justice ordered that the GRA was to pay the storage costs as well as the costs of the lawsuit in a specified sum to Mr. Basdeo.

In an invited comment Mr. Dhurjon stated that “the Excise Act and its regulations do not permit the GRA to charge beyond 10% in excise taxes. For the last year, the GRA has been overcharging re-migrant taxpayers illegal excise taxes to the tune of hundreds of millions of dollars cumulatively…This verdict opens the door for all re-migrants who paid above 10% in [within that period] excise taxes to seek a refund.” The government subsequently gazette the amended regulation re-migrants, settlers, and returning students detailing that they are now required to pay five percent excise tax on  vehicles which has a Cubic Capacity (cc) of less than 1500cc, vehicles those with between 1500cc-1800cc are also required to pay five percent tax, those with 1801-2000cc are required to pay 10 percent tax, those with vehicles that have 2001-3000 cc are required to pay 20 percent and those with above 3000 cc are now required to pay 30 percent on taxes.

• AFC, excise tax increase, Government, Nigel Hughes, re-migrants