At opening of COTA conference…
Minister of Finance, Dr. Ashni Singh, in talks with delegates present for yesterday’s opening session of COTA’s 23rd annual conference
Minister of Finance, Dr. Ashni Singh, in talks with delegates present for yesterday’s opening session of COTA’s 23rd annual conference

Make business facilitation and revenue mobilisation ease complementary
– Dr. Singh

THE delegates of the 23rd General Assembly and Technical Conference of the Caribbean Organisation of Tax Administrations (COTA), which opened yesterday at the Pegasus Hotel in Georgetown, were charged by Finance Minister Dr. Ashni Singh, to make business facilitation and revenue mobilisation ease complementary.“How do we make more complementary objectives of business facilitation and revenue mobilisation ease the tension that exist between these two objectives?” He questioned.

Delegates at the Conference of the Caribbean Organisation of Tax Administrations (COTA), which opened yesterday
Delegates at the Conference of the Caribbean Organisation of Tax Administrations (COTA), which opened yesterday

Dr. Singh added, “How we balance that business facilitating dimensions of our mandate with the revenue protection and collection and striking the appropriate balance between those two competing objectives is the essence of the challenge.
“We need to raise revenue, but we need to ensure that our tax jurisdiction is competitive from a tax perspective; we need to ensure that we are a taxpayer friendly tax administration; we need to ensure that our tax policies are conducive to private sector growth and development, and so balancing those two competing objectives is really the challenge before us as policy makers and administrators.”
The Finance Minister acknowledged that protecting and mobilising revenue to meet very considerable demands of the fiscal realities of countries is an issue whose resolutions have no easy answers.
He said, “At a time when we need to attract more investment, both domestic private investment and foreign direct investments, at a time when we need to make our business environment more competitive because today our countries are rated on how many days it takes to clear a container at the port, or how many days it takes to process a trade transaction, or how many steps are involved in making a payment of taxes, or how many taxes we have.
“At a time when we need to mobilise investments, when we need to make our business environment more competitive; at a time when we have a strong compelling imperative to facilitate business.

Minister of Finance, Dr. Ashni Singh, and Mr. Khurshid Sattaur, Commissioner General, Guyana Revenue Authority.
Minister of Finance, Dr. Ashni Singh, and Mr. Khurshid Sattaur, Commissioner General, Guyana Revenue Authority.

“…How do we go forward, move from a point where business facilitation and the revenue protection and mobilisation are competing objectives and instead are made complementary objectives? How do we bring these two objectives and make them complementary rather than competing objectives?”
The answer to the latter, Dr. Singh said, is not easy or obvious.

FISCAL FRAGILITY
To this end, he noted that the theme for the conference is of particular relevance and importance.
This year’s event, which Guyana is hosting for the first time, is being held under the theme, ‘Efficient Tax Administration as a Catalyst for Growth and Development in CARICOM (Caribbean Community)’.
The Finance Minister said, “I do believe that there has been no time in our Region’s history like this, to which this theme could have been deemed to be more relevant.
Dr. Singh stressed the fact of the matter is that, whether countries wish to accept it or not, across the Caribbean, countries are in a situation where their “fiscal fragility” is more evident and starker than anytime in living memory.
According to him, in current times, even economies in regions that have been regarded as more prosperous, more robust, more vibrant and certainly more prosperous, are among the countries that confront the challenges of unsustainable debt of a fiscal deficit that is inconsistent with a trajectory, which will return the countries to sustainability.
Dr. Singh said, “We face the reality of slow economic growth, to put mildly in some instances, the need for significant fiscal interventions to stimulate growth at a time when there is no fiscal space to enhance those interventions.
“Today we see more of our countries, including those like I said, some of the stronger economies, returning to instuitions like the IMF (International Monetary Fund) for structural programmes aimed at strengthening our macro-economic situation, improving our macro-economic balances and in particular, focusing on debt and economic growth.”
The Finance Minister noted that there have been efforts to address the issue of countries’ “fiscal fragility,” but stated that these plans for “ambitious reforms” place countries under pressure in terms of their implementation.
“These are reforms that I know will place many colleagues and countries around the Region under pressure to implement if we are to achieve better fiscal sustainability. Not next year, but in 20 years’ time. So this is a situation confronted by the Region. This is the reality,” he said.
He added that there are realities “over and above” the challenges of achieving accelerated and sustainable economic growth, and over and beyond the challenges of the strong competing expenditure demand.
Dr. Singh said, “Across all of our countries, we have tried to make the investments that are fundamental to increase quality of life of people.
“We want to make investments that are so critical to capitalised entrenched economic growth. We want to upgrade our infrastructure. We want improve our social services. We want to improve our competitiveness environment and we want to do all that at a time when fiscal resources and fiscal space are scarce.
“This is the reality that we face and I don’t believe that any of us enjoys immunity from this reality as the guardians, the chief collectors of fiscal revenues of our respective countries.
“In fact, there are other realities over and above the challenges of achieving accelerated and sustainable economic growth and over and beyond the challenges of the strong competing expenditure demand.”
He stated too that the COTA conference comes at a time when the global economy is “unhelpful” to small countries.
“We meet at a time when the global and regional trade architecture is moving in a direction where international taxes are becoming more and more scarce. We meet at a time when official development assistance and the flow are contracting rapidly and so that more than any other time in our history, domestic revenue mobilisation takes on an unprecedented importance. So the importance of the people in this room today is not to be underestimated,” Dr. Singh.
On that note, he made it clear that reforms can affect change, but these are never easy.

GUYANA CASE
He referenced Guyana’s moves in reforms, which he made clear were an uneasy undertaking, but one that yielded benefits.
The Finance Minister said, “We have developed in Guyana our own indigenous response and I say sometimes/perhaps we have reaped the benefits of feeling the pain earlier than some of our colleagues in the Region, because we did feel the pain earlier than some of our counterparts in the Region; and so many of the tough decisions that some of my colleagues are now facing are decisions we have had to confront a few years ago.
“I would mention just a few of them, some of them in fact are on the agenda, of the decision for example, and if I speak on the tax administration side, to establish a single revenue authority that integrates the administration of trade and taxes, domestic income taxes and the consumptions taxes with the value added tax, which we implemented years ago and which I know you are contemplating of implementation.
“Bringing together in a single administrative sector, an integrated tax administration office, the establishment of a single revenue authority was a decision that we did not take lightly. It engaged considerable reflection on our part. We were dealing with, at that time, two very large, very important departments – the Customs and Excise Department and the Inland Revenue Department as was then known. We were dealing with the risk of disruption to the discharge of the important function of these entities as was always the case when one is undertaking administrative reforms; but we recognised the advantage of integrating tax administration and these advantages are better known to you than I would pretend that they are known to me.”
Among other initiatives he cites were: a single integrated database; being able to triangulate tax payers activities across various spheres of the economy; being able to triangulate tax payers declarations at the point of income etc.; coordinating between level of activity on import side and the level of activity on domestic trade side and bringing these together for more efficient tax administration; the computerisation, the use of information technology in the computerisation of tax administration function; institutional reforms streamlining with the structure of the revenue authority;and strengthening departments like the audit and enforcement department to better enable administration and enforcement of our tax laws.
“All measures have been undertaken in strengthening tax administration…that work has already yielded significant returns for us in Guyana and we intend to continue along this path,” he said.

VAT IMPLEMENTATION
A major change, in terms of Guyana’s tax policy through Value Added Tax (VAT), was also alluded to and Dr. Singh noted that Guyana’s work is not complete, but progress has been made, in making tough decisions.
He said, “I have had this conversation with many of my colleagues across the Region …I know that many of you are grappling with confronting the reality of introducing the VAT, or have just introduced the VAT.
“We, recognising the merit of a VAT and its inherent advantage on the way it functions , a tax and consumption that is value added, took the initiative to introduce a value added tax at the same time eliminating six other more efficient and in most cases cascading taxes, abolished those, and as an ongoing process of reform, not only abolish those six taxes and introduce the VAT , but at the same time, over a space of a few years, doubled the free income tax threshold, that is the threshold where a person pays zero income tax, increased the threshold for property taxes by several 100 per cent to take it to a point where the most venerable person in the economy will not be paying property taxes, reduce personal income tax rates, in a space of just a few years, from 33.3 per cent to 30 per cent and reduce corporate taxes by five per cent.
“Taken together, these measures have very significantly contributed to revenue mobilisation, but at the same time making Guyana a more attractive place for doing business, a more competitive place for doing business. “
The Finance Minister highlighted that improving Guyana’s tax system, both in terms of policy and administration, is a work in progress.
“We continue to face the reality that there are certain hard-to-tax categories of taxpayers that are still, probably, carrying their fair share. We have contemplated a lot of initiatives in this area; particularly with professionals. This is something that is actively engaging our attention,” he said.
In this regard, he reiterated the importance of the COTA conference, as it is a forum that promotes the sharing of experiences, which is a critical element of the mandate of the COTA.
Dr. Singh said, “I have no doubt that representatives of Guyana, today, would be happy to share their experiences with you and I equally have no doubt that they will be eager to learn your experiences and how you have confronted these challenges with tax administration. More importantly, we can advance closer cooperation and collaboration across tax jurisdictions.

The Finance Minister reiterated his call for focus to be placed on making more complementary the objectives of business facilitation and revenue mobilisation, as well as easing the tension that exists between these two objectives.
Also addressing the conference were COTA President representative, Mr. Charles Cudjoe, and Caribbean Community (CARICOM) representative, Desiree Field-Ridley. Among those in attendance were representatives of the private sector and other stakeholder agencies.
The conference is slated to run until July 25, and tax administrators from across the Region will be deliberating on a number of tax issues, exchanging ideas and sharing experiences in keeping with the theme, for the shaping of useful approaches to tackling problems common among administrations.
COTA was established in 1971 at a meeting of the Heads of Regional Tax Administration convened in Saint Lucia, when its Constitution was ratified. This year will mark the 43rd anniversary of the establishment of COTA. Guyana held the presidency for the period 1984-1986 through Mr. Edgar Heyligar, then Commissioner, Inland Revenue Department.

(By Vanessa Narine)

SHARE THIS ARTICLE :
Facebook
Twitter
WhatsApp

Leave a Comment

Your email address will not be published. Required fields are marked *

All our printed editions are available online
emblem3
Subscribe to the Guyana Chronicle.
Sign up to receive news and updates.
We respect your privacy.