The Guyana Revenue Authority (GRA) has criticized Opposition Leader, Bharrat Jagdeo for labelling a recent tax settlement between the revenue body and Demerara Distillers Limited as ‘scandalous.’   

In a statement the GRA said that it does not encourage discussions about taxpayers’ issues or information in the public domain and notes its disappointment with Jagdeo, “who ought to have known better, would seek to expose the business of a taxpayer as well as attempt to have information on other taxpayers disclosed, even though he knows that these are violations of the oath of secrecy that the GRA is mandated to protect.”

According to the GRA it finds it astonishing that, given the history of violations of taxpayers’ privacy that occurred under Jagdeo’s government’s stewardship, which Guyanese found repugnant, that he would want to encourage the GRA to continue to operate along those unacceptable lines.

Notwithstanding, the GRA stated that the matter had engaged the attention of the Courts since 2002 at great cost to the national coffers and tax payers. The agency accused Jagdeo of attempting to reconstruct the 14 years of failure by his government to bring this matter to an end.

“After almost 14 years with no satisfactory outcome insight, the GRA exercised its right to settlement in order to avoid more years of litigation and the consequent loss to the national coffers as DDL was likely to take the matter to the CCJ; that settlement was calculated based on what the law permits.”

The GRA said it is important to note that Jagdeo’s formula upon which he based his speculations about the consequences of the negotiated outcome shows that the government actually gained a profit of G$231 million under the scenario he proffered.

“Mr. Jagdeo is fully aware that once a debt owed exceeds one year, its value must be discounted for every year it remains uncollected. During that 15-year period of litigation and based on the interest rate of 10 percent that he chose, his G$5.3 billion would have been worth G$1.3 billion to the government after 15 years.”

The GRA again said it found Jagdeo’s objection to its efforts to have an amicable relationship with taxpayers, including those in the business community troubling, noting that the tone of his views as reported in the newspapers present taxpayers as if they are to be enemies of the State.

“It is therefore, important for the GRA to reiterate that it views taxpayers as partners in the development of Guyana and therefore, explores all avenues available to have taxpayers honour their tax obligations without prejudice and at the same create an enabling environment for legitimate businesses.”

Last week Tuesday DDL announced that it had reached an amicable settlement to resolve a longstanding dispute over Consumption Tax that began in 2002. The company said the settlement follows an extended legal battle between DDL and the GRA, arising out of the Consumption Tax assessment levied against DDL by then Commissioner-General Khurshid Sattaur in January 2009, in the sum of $5.3 billion.

Jagdeo had said that since the settlement was arrived at only on March 9, 2016, it means DDL had use of the money for 15 years.

“If one were to calculate interest on this sum at a rate of 10 per cent per annum, using only the past 10 years, the liability would amount to $10.6B. The GRA assessment of $5.392B was based on a formula handed down by the court, but yet DDL refused to pay,” Jagdeo stated.

According to Jagdeo, the settlement also writes off all possible liabilities in respect of Excise Tax up to March 9, 2016.  “So if the same situation obtains with regard to the Excise tax between 2006 and 2016, then the liabilities would run into tens of billions more,” he contended.