HAVING met with miners to provide clarity on tax-reporting regulations recently, the Government is currently exploring a renewable one-year concessionary agreement for items, including fuel and equipment.
This is according to Minister of Finance, Winston Jordan, who said that with this new regime, miners and mining companies that are in tax compliance are entitled to certain allowances and refunds, which they will receive. He noted too that the administration is committed to ensuring that there is a level playing field when it comes to taxation.
The minister’s comments were made following reported threats by members of the Guyana Gold and Diamond Miners’ Association (GGDMA) and the Guyana Women Miners Organisation (GWMO) to reduce gold declarations and stage mass protests in defiance of the new tax regulations.
It was also reported that the two organisations wrote President David Granger stating that “…on behalf of miners throughout Guyana, we at the GWMO and the GGDMA have been mandated to request an urgent meeting with yourself…” to discuss the new tax regime.
But after meeting with the bodies, Minister Jordan made it clear that government has no agenda against any sector in Guyana.
“We don’t have any agenda out for any sector. We want to promote these sectors in a responsible and environmentally friendly way. We have said openly that our mission is to reduce taxes, but at the same time we are on a mission to ensure that every sector and every individual in this country pay their fair share of taxes. This is not an exercise to target anyone,” he said.
Gold declaration for 2016 reached a record high of 705,000 ounces at the end of the year. Minister Jordan also expressed the view that, “Somebody is pushing an agenda that seeks to rile up miners without trying to explain the issues to them… When we go down this road saying that the Government does not understand the difficulties in mining, we are getting into realms that suggest that some sectors should be exempted from paying taxes.”
The new tax measures that were announced in the 2017 budget would see an increase in the Tributors’ Tax from 10 percent to 20 percent and a two percent tax on gross, and would also include a requirement to file income taxes at the end of the year.
Moreover, certain goods and services will now attract the Value Added Tax (VAT). Miners are also mandated to keep up-to-date records of all their transactions.
Concessions and taxes
According to the Finance Minister, Government has never been averse to considering various concessionary measures for the mining industry and has demonstrated that shortly after taking office with the signing of an agreement with the GGDMA. That agreement grants tax concessions on fuel and a range of equipment and supplies.
Minister Jordan lamented too, that members of those two organisations were quoted in the press as saying that the Government has removed the concessions, when the fact of the matter is that the life of the agreement came to an end.
He said that when the National Assembly was considering the 2017 budget, he met with stakeholders at Parliament Building where they discussed the implementation of a new one-year agreement for 2017 at the end of which miners will have the option to renew.
He noted that a post-budget meeting was also convened in January with the GGDMA, GWMO, small miners and sector ministers, Natural Resources Ministers Raphael Trotman and Simona Broomes.
“At the end of that meeting, we thought we had an understanding and clarifications and on various other issues. I even suggested that we, the Government, together with those organisations, issue a joint press release indicating some of the agreements that were reached. The next morning in the newspapers the GGDMA claimed that the meeting was hijacked by small miners and nothing came out of it. This was patently false,” Minister Jordan stated.
Small miners, he said, were advised to form themselves into syndicates or cooperatives, after they had complained bitterly that they were not benefitting from any of the concessions that the Government was providing. He reasoned that Government is of the view that this would be a more efficient way of ensuring that small miners are not overlooked.
Heartened that small miners have been resisting the instigators, the Finance Minister noted that the relevant Government agencies must go to the miners directly to sensitise them on the new tax measures, rather than having intermediaries, who are confusing the miners.
This publication recently reported that a group of small miners had issued a statement saying that “Critically, the invitation to small miners to attend the meeting also points to an encouraging official recognition of the legitimacy of the pursuits of small operators in the sector. We applaud, equally, the Ministries of Natural Resources and the Guyana Revenue Authority (GRA) for taking this initiative.”
It went on to say that “Small miners will not be oppressed by these measures as the GGDMA, Mr. Christopher Ram and the GWMO tried to make them believe at a previous meeting.”
With regard to objections raised about the filing of income taxes at the end of the year and the increase in the Tributors’ Tax, Minister Jordan explained that at the meeting in January, Commissioner-General of the Guyana Revenue Authority (GRA), Mr. Godfrey Statia, explained in great detail, the benefits of filing and submitting income tax returns.
“Mr. Statia told the gathering there that were the miners to submit their returns, many of them would be entitled to tax refunds, because Tributors’ tax is deducted from your gross income and income tax is deducted from your net income… right now they are not submitting income tax returns and, therefore, they are forced to pay withholding-type taxes. They do not get the benefit of the personal allowances that are given to people, who file tax returns,” Minister Jordan said.
Meanwhile, in an interview, the Commissioner-General reiterated that the new measures will ensure that all tributors from whom taxes are deducted benefit from their respective allowances and they get their refunds, which he said the GRA is committed to make available within one month of the returns being filed. He said that this would bring them into compliance and will make their tax portfolios consistent with every other taxpayer in the country.
Statia said too that contrary to what is being peddled in the press, the GGDMA was informed of the new tax measures.
“I met with the GGDMA in August when I came on and explained to them, some of the new measures that I would be recommending to the Government and the rationale for recommending them,” he said.
The GGDMA and the GWMO also complained about being burdened with paperwork and the minister informed them that GRA will be setting up a special section to assist miners as much as possible with paperwork.
Miners were given the assurance that even in cases where they do not have TIN certificates, they will not be hassled. The Authority will also ensure that their tax returns are filed. To support these efforts, it was agreed that a desk will be set up at the Ministry of Natural Resources to specifically help miners with paperwork.
Additionally, the GRA is working on a booklet that will outline in plain terms, requirements under the law and details of certain procedures and the benefits therein. This publication, which will also contain the inputs of the GGDMA and small miners, will be made available as a guide to all members of the mining community.
The GGDMA also took issue with the requirement of having to keep proper books and daily records, but the GRA Head advised the group that this was not a new practice, but has been the law since 1988, but which was not strictly adhered to.
“These laws as they entail would not affect 95 percent of the miners; the only persons who these laws would be affecting would be those major gold miners who have not been making all of the declarations to the Guyana Gold Board,” Mr. Statia said.