Even with less paperwork…
…but says up to the task of upping collections
COMMISSIONER-GENERAL of the Guyana Revenue Authority (GRA), Khurshid Sattaur, says the organisation is ready for the challenge of higher revenue collections for 2011 in the wake of targets that Minister of Finance Dr. Ashni Singh’s budget outlined on Monday. In an interview with the Guyana Chronicle yesterday, Sattaur said, “We have a Herculean task ahead of us…we do not want to be distracted by politics [this election year].”
Sattaur said while last year’s target for revenue collection was $94B, this year’s target is $104.4B. Further, he said with the readjustment of corporation tax downwards and the raising of the income tax threshold, it means that the GRA will lose a further almost $4B in revenue.

Said Sattaur: “The GRA is poised for a major take-off, linked with the take-off of the economy. We are operating like a modern organisation right now [with the requisite

training, work plan and monitoring in place].”
Speaking on the budget measures Minister of Finance, Dr. Ashni Singh, announced on Monday, Sattaur said they would eventually have a significant positive impact on collections, despite there being the displacement of revenue because of them.

Income tax threshold went from $35,000 to $40,000 a month, and the corporation tax for commercial entities and non-commercial entities from 45 percent to 40 percent, and from 35 percent to 30 percent respectively. He said that the readjustment of the corporation tax will cost the treasury $2.2B, while the upping of the income tax threshold means that the GRA will collect $1.7B less than last year. “I have to recover that,” he said.

Sattaur said that for the first time in the country’s history, companies are paying less tax than individuals, who are taxed at 33.3 percent. “We hope that there will be reinvestment by businesses [because of the corporation reduction]. They can use more of their profit to acquire more machinery. The sum of $2.2B could be reinvested into those businesses for retooling, employment and becoming more export-oriented,” said Sattaur.

He said this is one measure that will accelerate growth in the economy. “I welcome this budget which augers well for the future, even though it poses a major challenge for me,” he said.

He said, however, that there are benefits too to the removal of such a large number of people from the tax net, since there will be less administrative work to do. This, Sattaur
said, will free up resources to go after the tax evaders. He said he plans to use the freed up resources to ferret out the dastardly employers who fail to remit the taxes deducted from their employees’ wages and salaries.

“While there is no new tax [in the budget], we want to pursue employers who use fraudulent means of evading taxes [to enhance collections],” said Sattaur. He noted that many employers disguise taxable income as allowances to avoid giving the treasury its due. These, he said, include travel and entertainment.
“We have to go after these persons to be able to collect [PAYE due] to make up for the loss brought about by the raising of the threshold,” Sattaur said.
On the statements by opposition elements damning the budget for not addressing the rate of value-added tax (VAT), Sattaur said a significant number of items consumed by the poor are VAT-exempt. He said if the VAT rate were reduced, the country would not be able to collect enough taxes to provide revenue for the provision of social services.
“VAT at 16 percent could not bring in the volume…VAT is an anti-avoidance measure and has certain built-in mechanisms to allow you to collect revenue. VAT has great potential for garnering revenue,” he said.