GRA Boss urges use of other tax incentives

By Devina Samaroo

Commissioner General of the Guyana Revenue Authority (GRA), Godfrey Statia noted said there are other forms of incentives besides a reduction in the rates of various forms of taxes that can see taxpayers paying less to the entity.

Statia made these remarks in response to cries from a business official during a luncheon and interactive session hosted by the Guyana Manufacturing Services Association (GMSA) at the Georgetown Club on Thursday.

“We should not only fight for the reduction of rates. We should also fight to have an increase in tax credits in some point in time,” he stated.

A tax credit is an amount of money a taxpayer is able to subtract from taxes owed to the government.

The value of a tax credit depends on the nature of the credit, and certain types of tax credits are granted to individuals or businesses in specific locations, classifications or industries. Unlike deductions and exemptions, which reduce the amount of taxable income, tax credits reduce the actual amount of tax owed.

Statia noted that tax exemptions are abused and recommended that the practice is replaced with tax credits in order to create a level playing field.

Meanwhile, Statia said there are many issues with the country’s tax system that needs correction. These include an excessive amount of exemptions, significant evasion and avoidance, low administrative capacity, a relatively narrow tax base, high effective tax rates in certain sectors, and failure to achieve the desired amount of equity.

The GRA Boss added that there are challenges when it comes to clearing tax refunds of taxpayers but noted that over $350M in reimbursements were issued for the year so far.

Statia was responding to a question raised by an accountant, Christopher Ram regarding the long periods that taxpayers have to wait to get refunds if GRA owed them money.

The Commissioner General admitted that it is only fair that GRA adds interest on those refunds if the process takes too long.

Furthermore, Statia said only 20% of taxpayers contribute to 80% of the revenue collected and in order to prioritise these collections, a large taxpayers’ unit will be established by November 2017.

Meanwhile, Head of the GMSA, Shyam Nokta called on the GRA to make doing business in Guyana easier for manufacturers.

“When Commissioner General met with our members last year, several issues were raised such as difficulties with outstanding exemptions for manufacturing imports; VAT refunds; Trusted Traders Compliance; inspection of containers with perishables; processing of export documentation; damage of goods for export and the use of the GRA Scanner; among others. To an outsider, these may not seem like major issues – but they serve as barriers to doing business,” he said.

Nokta said he hopes to see these challenges addressed in order to create a more conducive environment for doing business.