THE Guyana Revenue Authority has expressed concern that there are some persons who are trying to avoid and evade taxes. These persons are engaged by companies to do a particular job, but operate as though they are under a contract of employment.

Commissioner-General of the Guyana Revenue Authority Mr. Khurshid Sattaur is urging such persons to voluntarily comply with the tax laws by taking the necessary corrective steps since they will be placed under the microscope, and the organisation will not hesitate to take all necessary measures to recover the taxes.

A GRA press statement yesterday said it should be noted that an independent contractor or self-employed person is bound to do the job he was contracted to do, and uses his own discretion as to how it would be done. Therefore, a person who is contracted to renovate a structure, execute a research, manufacturing or other project is deemed a self-employed person and is required to file returns and pay taxes in the legally prescribed manner for self-employed persons.

On the other hand, an employee under a contract of employment “agrees to undertake certain duties under the direction and control of the employer, in return for a wage or salary” from which taxes are deducted.

Self-employed persons are required to assess themselves and pay their taxes in quarterly installments, which are due on the first day of the month following the end of every quarter. Hence, payments are to be made on or before April 1, July 1, October 1 and the final payment on or before December 31 every year. Persons who are in their first year of business are required to estimate their earnings for the year and make payments accordingly. For ongoing operations, the previous year’s earnings must be used to determine the taxes due.

The earnings of a self-employed person that is subject to tax (chargeable income) is his gross income from all sources for the year less total deductions and exemptions allowed for each source under the Income Tax Act.

It must be noted that while taxes are paid during the year, income tax returns are submitted on or before April 30 of the following year and must be accompanied by a computation of the assessable income in the form of a profit and loss or income and expenditure statement along with a balance sheet. Proper accounts and records pertaining to income and expenditure must be kept for eight years.

Mr. Sattaur stated that where necessary, the badges of trade, such as the profit motive, will be considered to determine the existence of trade by a self-employed person or independent contractor for taxation purposes.

He noted that the weight attached to each factor or badge will depend on the precise circumstances.

Independent contractors/ self-employed persons are therefore urged to pay their taxes accordingly, the statement concluded.