– according to GRA boss
– agency received 1,487 applications to date

THE Guyana Revenue Authority (GRA) is dissatisfied by the level of co-operation shown by the various banking institutions as it relates to processing information necessary for facilitating the Mortgage Interest Relief (MIR) scheme.

This scheme which was provided for in the 2013 National Budget is geared at providing a 30% relief on the gross interest paid on first time mortgages amounting to $30M or less and requires the assistance of the various lending institutions.
In October 2013, the GRA held workshops with representatives from the various lending institutions and began its public education campaign which has been very aggressive in providing the information necessary for mortgagers to qualify for this relief.

But GRA’s Commissioner-General, Mr Khurshid Sattaur said the biggest hurdle, to date, has been the receipt of applications without the accompanying bank information. This, he said, has forced the Revenue Authority to accept applications which cannot be processed since “the relevant Letter by Lender Form (Form 2) and Schedule of Interest per Year are missing”.
“Without this key piece of information applications will not be finalised for approval,” Mr Sattaur declared.
He noted that, of the applications received thus far, 470 were submitted by customers of Republic Bank, 687 from New Building Society, 96 from the Guyana Bank for Trade and Industry, 87 from the Bank of Nova Scotia, six from Demerara Bank, four from Hand in Hand Trust, 50 from Citizens Bank and two from Bank of Guyana. Of this amount, in excess of 207 applications were received with outstanding bank information.
To date the GRA has received 1,487 applications of which 1,437 were received in 2013 and the additional 50 were submitted in the first two weeks of 2014.
Sattaur said this statistic is quite troubling and the GRA will be having talks with the relevant stakeholders in an effort to fully understand the reason for the lack of information being provided to those mortgagers who have expressed their desire to benefit from this relief.
In an effort to facilitate the processing of the Mortgage Interest Relief, the agency has established a Unit catering specifically to this scheme. This Unit is fully staffed and equipped to address the needs of persons accessing this service and will continue to process applications as submitted. Persons desirous of receiving additional information and those seeking clarification or requesting assistance in relation to the MIR, can contact the Mortgage Interest Relief Unit on telephone # 227-6060 or 227-8222 ext 1040 or the Tax Advisory Services Section on extensions 1200 – 1204.

BACKGROUND TO ‘MIR’ PROGRAMME
Finance Minister, Dr. Ashni Singh, on October 8th 2013, signed and sent for publication in the Official Gazette the Income Tax (Mortgage Interest Relief) Regulations 2013, thereby establishing the regulatory foundation for mortgage interest relief (MIR) to be granted pursuant to the introduction of this measure announced in Budget 2013.
At the time of presenting the 2013 National Budget, Minister Singh announced the introduction of MIR with effect from year of income 2013. Under the newly introduced relief, the Finance Minister stated that “first time home owners who are holders of mortgage loans of up to $30 million granted to them by commercial banks or the building society will be permitted to deduct the interest they pay on such mortgages from their taxable income for the purpose of personal income tax. In other words, that portion of taxable income used by a first time home owner to pay interest on a housing loan of up to $30 million from a commercial bank or building society will be exempt from personal income tax”.
In announcing the introduction of MIR at the time of Budget 2013, Minister Singh situated the new measure within the context of the outstanding success of the Government’s housing programme.
He stated at the time that “this Government’s housing programme has been a resounding success and has resulted in tens of thousands of Guyanese individuals and families graduating from being tenants of rented property to being homeowners in their own right. Armed with real property as an asset which can in turn be collateralised, the positive consequences for owner participation in the formal financial system, and capacity to borrow to finance asset acquisition or even small business establishment and expansion, have been immeasurable. In addition to our programmes to develop housing areas and distribute house lots, other policies have been adopted to promote home ownership. These include the special low income housing windows established at the commercial banks under which interest income earned by the banks is exempt from corporate taxes, allowing the banks to offer subsidised interest rates to borrowers of loans for low income housing development.”
Coupled with the rapid growth in low income home ownership has been equally rapid growth in demand for middle income housing with the growing numbers of young professionals and other middle income earners in our society today.
The introduction of MIR is expected to cost Government approximately $580 million annually, and will benefit tens of thousands of first time home owners, low and middle income alike.
At the time of signing the necessary regulations in October last year, Minister Singh called on the Guyana Revenue Authority and the participating financial institutions to proceed to implement the regulations as soon as possible to ensure that the intended relief is delivered to the beneficiary population.
The Finance Minister stated that “this relief is expected to make home ownership even more affordable and attractive, will increase disposable incomes in thousands of households, and will constitute a significant injection of cash into the economy for both saving and consumption, thereby generating and multiplying further business activity”.
The Finance Minister’s announcement of MIR at the time of Budget 2013 was widely applauded as a measure that would significantly improve the wellbeing of current and pending homeowners and that would contribute to further growth in the economy as a result of the impetus it will give to home ownership and construction activity.