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Govt. hands out GYD$274B in tax exemptions in 2023, earned GYD$366B – AG Report
(Govt. hands out GYD$274B in tax exemptions in 2023, earned GYD$366B )
Kaieteur News- In the Auditor General’s Report for 2023, exemptions from duties and taxes in Guyana reached a total of $273.931 billion, marking a significant increase of $110.698 billion or 68% over the $163.233 billion granted in 2022.
This substantial rise in exemptions is largely attributed to an uptick in conditional tax concessions, which are provided to various sectors and projects. The report highlights that conditional tax exemptions granted in 2023 amounted to $273.169 billion, compared to $145.517 billion in 2022, reflecting an increase of $127.651 billion.
Companies and businesses received the lion’s share of these concessions, with exemptions climbing from $126.240 billion in 2022 to $233.207 billion in 2023—an increase of $106.967 billion representing 86% of all conditional exemptions for the year.
Other beneficiaries of conditional tax exemptions include:
– Ministries/Government Departments: $20.544 billion (up by $9.744 billion)
– Re-migrants: $4.785 billion (up by $2.415 billion)
– Diplomats: $1.804 billion (up by $540 million)
– Public Officials/Officers: $2.556 billion (up by $406 million)
– Foreign Funded Projects: $5.640 billion (up by $4.646 billion)
– Hospitals: $3.386 billion (up by $2.958 billion)
Other categories saw decreases, such as churches and charitable organisations, which experienced a decline in exemptions by $449 million compared to the previous year.
Also, unconditional tax exemptions fell sharply from $17.714 billion in 2022 to G$761 million in 2023, a decrease of $16.953 billion.
Drivers behind the increase
The surge in tax exemptions is mainly driven by a substantial rise in exemptions for companies and businesses, particularly through Investment Agreements. These agreements, facilitated by the Guyana Office for Investment (Go-Invest) and the Guyana Geology and Mines Commission (GGMC), saw exemptions climb from $116.451 billion in 2022 to $200.337 billion in 2023, an increase of $83.885 billion.
The most notable increases in tax exemptions within the business sector include:
– Manufacturing: $14.583 billion (up by $11.542 billion)
– Fuel: $10.551 billion (up by $8.779 billion)
– Construction: $1.873 billion (up by $1.202 billion)
– Mining: $919 million (up by $474 million)
– Aircraft: $335 million (up by $246 million)
Some sectors, however, saw reductions in exemptions, such as forestry and public transportation.
While the AG report lists the taxes foregone as exemptions, it should be noted that the Guyana Revenue Authority (GRA) does not forego taxes. It was previously explained that the Government of Guyana (GoG) sign agreements with companies and on the basis of those agreements, taxes are incentivized. Notably, exemptions are usually done through legislation, and the CARICOM Common Market treaty, to name a few.
Revenue Collection
Moreover, it was stated in the AG’s report that according to GRA’s Statements of Receipts and Disbursements, the sum of $320.110 billion was estimated to be collected as revenue for the year 2023. However, while this figure was revised by the Authority to $350.346 billion, the actual collections paid into the Consolidated Fund totalled $366.615 billion. The report states that this represents a positive variance of $16.269 billion, equivalent to 5% above the revised estimated collections.
(Govt. hands out GYD$274B in tax exemptions in 2023, earned GYD$366B)
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