Mr. Speaker, I propose to amend the Income Tax Act to give exporters a tax credit equivalent to the applicable VAT paid in relation to water and electricity, once proven to the satisfaction of the Commissioner General, GRA, that such VAT was charged and paid in relation to the goods manufactured and exported.
Remission of VAT
Mr. Speaker, in order to ensure the consistent application of the tax laws, and in keeping with Section 105 of the Income Tax Act – which allows the Minister of Finance to remit income tax – I propose to amend the VAT Act to provide for the Minister of Finance to make regulation to remit, in whole or in part, the VAT and the interest on VAT payable by any person, where good cause is shown.
Mr. Speaker, in Budget 2018, I alluded to the critical nature of the transportation sector in the economy. In recognition of that, the rates of Excise Tax on overland transportation imported for tourism purposes in the interior/rural and riverine areas were reduced, thereby bringing relief to businesses operating in those areas, especially Regions One, Seven, Eight, and Nine. I now propose to add Region 10 to the regions identified to benefit from this concession.
I propose to introduce a tax credit, equal to 75 per cent of income and corporate taxes payable on profits from tourism activities, for persons investing in Regions One, Seven, Eight, Nine and 10.
I propose to exempt from the payment of import duties and excise taxes, motor buses with twelve (12) or more seats, not exceeding four years old, purchased and used exclusively for the transportation of tourists anywhere in Guyana, and registered and licensed as a tourism operator by the Guyana Tourism Authority (GTA). The GTA will also verify that the said operators satisfy the registration and licensing conditions for five years subsequent to receiving any concessions, and all such vehicles will have painted stripes similar to the zoning for minibuses.
Further, Mr. Speaker, hotels in the named regions will benefit from the proposed amendments to the Income Tax Act and the Income Tax (In Aid of Industry) Act that will allow the grant of wear and tear and initial allowances on hotel buildings.
New 46-page passport
Mr. Speaker, I wish to announce the introduction of a 46-page, machine readable passport. Business persons and other frequent travellers would find this new passport both attractive and convenient. It is priced at $10,000. The 32-page passport remains available at the current price of $6,000.
Refunds of Revenue
Mr. Speaker, as currently obtains, refunds for the overpayment of customs duty and income tax are dependent on resources made available in the budget. In addition to causing unnecessary delays and inconvenience to the taxpayer, it is administratively burdensome for the GRA. I propose, therefore, to amend the Customs Act and the Income Tax Act to allow for the payment of customs duty and income tax refunds to be done out of the Customs Duty revenue and the Income Tax revenue, respectively.
Only the net revenue collected for Customs Duty and Income Tax will be paid into the Consolidated Fund. This treatment of refunds is identical to, and consistent with, the payment of VAT refunds, which is done out of current VAT revenues. I believe that this new system will reduce the angst and anxiety suffered by taxpayers as a result of the protracted delays in processing refunds.
Mr. Speaker, I propose to amend the relevant sections of the Tax Act, in particular Sections 18, 19, 20, 22, 40, 41, 44, 46, 47, 48, 50 and 54 to include the 10 established towns – Anna Regina, Bartica, Corriverton, Georgetown, Lethem, Linden, Mabaruma, Mahdia, New Amsterdam and Rose Hall – for licence purposes.
Increased years for driver’s licence
I propose to amend the Motor Vehicle and Road Traffic Act to increase the duration of a driver‘s licence from three years to five years, and a small increase in the fee from $4,000 to $5,000. In keeping with prior amendments, pensioners will not pay any fee for a passport. The longer duration will allow for the freeing of human and other resources, which will be devoted to the critical oil and gas area.
I propose to amend Section 60A of the Income Tax Act to reduce the cost of reprint/replacement of a TIN certificate from $5,000 to $2,000. The cost for a TIN certificate for a first time applicant would remain at $1,000.
I propose to amend the relevant section of the Income Tax Act to bring greater clarity to the definition of – contractor, for the purpose of deducting the two per cent withholding tax.
I propose to amend the First Schedule of the Tax Act to include the profession of Tax Preparer, to allow for a tax practice certificate to be issued to persons who, in the opinion of the Commissioner General, are so qualified to offer accounting and tax services to taxpayers. A registered Tax Return Preparer who is not a member of a recognised accounting body, will be required to pass a competency test covering such issues as taxation, preparation of individuals‘ tax returns, and ethics.
I propose to amend the Income Tax Act to remove the requirement for the Commissioner General to send Notices of Assessment to taxpayers whose liability is less than $1,000. This would reduce the cost and administrative burden of printing and posting these Notices of Assessment. At the same time, the law will also be amended to provide for the service of Notices of Assessment either by e-services, regular post or registered post.
Mr. Speaker, altogether, these measures will result in a net loss of revenue of $3.5 billion, which will clearly redound to the benefit of the taxpayers.