…says its actions are good for investment

THE notion that the garnishing of taxes due to the Guyana Revenue Authority (GRA) “sends a bad signal to investors” is highly flawed as investor confidence is increased when individuals and companies, whether foreign or local, are requested to pay their rightful share of duties and taxes.

This is the message of GRA in response to such comments made by Leader of the Opposition, Bharrat Jagdeo, after the authority asked Trinidadian construction company, DIPCON Engineering Services Limited, to pay up some US$2.5M in taxes owed. The company is pursuing Minister of Finance, Winston Jordan, in his personal capacity, for US$2.2M owed by the State under the former People’s Progressive Party (PPP) administration.

In a Letter of Garnishment from GRA Commissioner General, Godfrey Statia, dated July 8, 2019 to Finance Secretary at the Ministry of Finance and Dipcon, the outstanding sum of G$527,846,657 was requested “with immediate effect”.

GOOD FOR INVESTOR CONFIDENCE
In a media release on Thursday, the authority explained that since Dipcon has ceased operations in Guyana, should the garnishment not be effected, the GRA would have had no jurisdiction over the monies collected once transferred out of the Guyana jurisdiction. “Assertions by the leader of the opposition in the Guyana Times that the decision by the GRA to garnish the taxes due ‘sends a bad signal to investors and damages an already struggling investment climate’ is therefore flawed,” the Guyana Revenue Authority stated. “The GRA was simply carrying out its mandate in accordance with the Revenue Authority Act. Contrary to such a claim, by ensuring the tax laws are administrated in a fair, transparent and consistent manner whereby all individuals and companies, whether foreign or otherwise, pay their rightful share of duties and taxes, this would lead to increased investor confidence.”

The GRA also came against the Guyana Times newspaper for comments attributed to Dipcon’s Legal Counsel, Timothy Jonas, who stated that “a similar letter from the GRA, about six months ago, was challenged by Dipcon and thrown out by the court”.
The authority informed that the legal counsel was making reference to a previous letter dispatched by the Commissioner-General in May 2018 to Dipcon which stated that, upon payment of the said judgment, taxes due by Dipcon, which has ceased to carry-on business in Guyana, be deducted from any such payment.

“The GRA disagrees with learned counsel on his choice of language which could lead to a misunderstanding of the effect of the court’s ruling. Contrary to what counsel’s statement has led the general public to believe, the power to garnish the said taxes from amounts due to Dipcon was merely deferred, since the learned Chief Justice in her considered judgment advised that the taxes could not be garnished at said time since the judgment had not been paid by the Government of Guyana,” the GRA stated.

It further explained that the Chief Justice stated that when the judgment is satisfied, monies paid pursuant to the judgment would be deemed income for the purposes of taxation. She had made it clear that, provided that the judgment has been paid to Dipcon by the Government of Guyana, the said judgment would then be deemed income for the purposes of taxation.

In his letter to Dipcon on July 8, 2019, the Commissioner-General also informed that his actions taken are in accordance to the country’s Income Tax Act. Section 102 (1) of the Act, Chapter 81:01 states: “When the Commissioner-General has knowledge or suspects that a person is or is about to become indebted or liable to make any payment to a person liable to make a payment of tax under this Act, he may, by registered letter or by letter served personally, require such first-mentioned person to pay the moneys otherwise payable to such second-mentioned person in whole or in part to him on account of the liability of the second mentioned person under this Act.”

Meanwhile, the Act states that the receipt of the Commissioner-General for moneys paid as required under the Act shall, to the extent of the payment, be “a good and sufficient discharge of the original liability”.

This goes for both the person who pays such moneys to the Commissioner-General, to the person liable to make a payment under the Act and the person liable to make a payment of tax under the Act to the Commissioner-General. The GRA Head also reminded that, according to the Income Tax Act, every person who has discharged any liability to a person liable to make payment of tax under the Act without complying with requirements under the section shall be liable to pay the Commissioner-General, as a debt due to the State, an amount equal to the liability discharged.

Otherwise, the Act stated that the person in question could have to pay to the Commissioner-General, as a debt due to the State, an amount equal to the liability discharged or the amount which he was required under the Act to the Commissioner General, whichever is less.