NON-COMPLIANCE with tax regulations continues to be a major issue for the Guyana Revenue Authority (GRA), but the Board of Directors has undertaken to closely monitor the situation in order to minimise cases of tax evasion.The eight economic centres outside of Georgetown — Anna Regina, Bartica, Corriverton, Lethem, Linden, New Amsterdam, Ogle and Parika — have been studied by the Board, and it was discovered that they are only contributing two per cent to the country’s revenue.

GRA Board Chairman Rawle Lucas stressed that revenue collection does not match the observed levels of economic activity in the studied areas.

“This is as much of a surprise to me as it is to others. One would have thought that an area like Corriverton, situated in Region 6, with its multi-sectorial economy and border trade, would be making a larger contribution to tax revenues than the $1.3B, and substantially more than an area like Linden, which brings in an amount of $1.1B in tax revenues on a much narrower economic base,” Lucas said.

“One is surprised, too, that areas like Anna Regina and Bartica combined cannot do as well or even better than the relatively depressed economic area of New Amsterdam,” Lucas told the media.

Asked whether the closing of the Berbice Anti-Smuggling Squad (BASS) had an impact on the low revenue collection from Corriverton, Head of the Customs and Excise and Trade Operations, Jameel Baksh, said he does not believe so.

He explained that there was a decline in imports from Nickerie to Moleson Creek, and that is one of the reasons responsible for the decline in revenue there.

“From previous experience, I don’t think that BASS was effective in terms of revenue collection in Berbice. We have received many reports that imports were coming across the Corentyne River and they were not apprehending smuggling. They were not effective in carrying out their functions,” Baksh said.

CORRUPTION
The issue of corruption and non-compliance with tax regulations has resulted in the disaggregation of data about tax collection for 2015.

The Chairman explained that the monitoring of tax performance is done at the level of the tax structure.

“We intend to disaggregate the data by sector, industry, regions, and by important economic hubs or centres. At this particular point in time, we have begun to disaggregate the data by important economic hubs or centres. The work done so far excludes Georgetown, which is by far the most important economic centre,” he added.

It is as a result of the preliminary results that the enforcement arm of the GRA must beef up its activities.
Minister of Finance, Winston Jordan, only recently, in an interview with this publication, said the entity must “make its presence felt”.

The Minister stressed that, with over one thousand persons working in the organisation, the GRA has “sufficient resources” to carry out its duties.

Based on information he received, the Minister said, although not in a position to state the amount of revenue collected for 2015, he believes the Revenue Authority may have experienced a shortfall of “less than one per cent” with respect to the amount of revenue collected last year.

“There are severe leakages of revenue in the economy,” Jordan told the Guyana Chronicle, noting that the GRA has to curb the problem.

“There is too much smuggling, under-invoicing, ‘big ones’ who are untouchable, and way too many instances of alleged corruption,” the Minister said.

Like Lucas, Jordan believes that more needs to be done on the part of the GRA to ensure revenue is collected.

“When tax collection reaches the stage of enforcement, demands of GRA become more onerous for the taxpayer. At this stage, one could expect some level of confrontation.”

He stressed the public must understand that the enforcement responsibility of GRA is demanded by the laws of Guyana that govern revenue collection and is executed by the Law Enforcement and Investigative Division, the Debt Management Division, Tax Audit Division, and supported by the Legal Division.

NO VILLAIN
“Taxpayers must understand that GRA’s employees are required by law to enforce revenue laws where voluntary compliance is lacking. One therefore must not view GRA officers as villains, for they are not; they are humans with an interest in success at their work, like every other Guyanese.”

Lucas noted that enforcement officers have their own tasks, but the intimidation felt by taxpayers, given the “power vested in GRA officers”, is understandable.

“Anxiety, desperation and inconvenience could all add up to a state of vulnerability that forces taxpayers to engage in what they might believe are transactions of relief,” the Chairman said.

But he was quick to warn that taxpayers who “succumb to frustration and harassment and engage in illicit transactions are themselves breaking the law and exposing themselves to prosecution”.

“We are asking all officers to be measured and considerate, and to act always in the view of achieving the best outcome for taxpayers, while protecting the interest of the Government. We are also asking our enforcement officers to be mindful of the laws and avoid forcing taxpayers into compromising positions,” he said.

The Board expects that GRA officers will conduct themselves with utmost professionalism, as the board has a zero-tolerance limit for corruption.

“It means that anyone found violating the Employee Code of Conduct will be dealt with condignly,” Lucas said.
The Chairman stressed that it is the intention of the Guyana Revenue Authority (GRA) to obtain a more accurate measurement of its tax base, to plan for the future.

He noted that “An inaccurate tax base leads to revenue losses”. Revenues are lost through all of the tax structures, but the self-employed, income tax, property tax, Value Added Tax (VAT) and import duties are of grave concern to the entity.

“One of the troubling things that we have seen so far is the inverse relationship between the total number of registered taxpayers and those paying taxes,” said the GRA Chairman.

He said that, in “an economy that was growing at an annual average of 4.5 per cent, the number of persons paying taxes was declining”.

This is something the Board will be studying, he said, so as to understand the behaviour of the variables and “reverse this unconfirmed yet troubling trend”.