THE Private Sector Commission (PSC) is urging the Guyana Revenue Authority (GRA) to engage other aggrieved companies and settle their cases using the same method applied in the Demerara Distillers Limited (DDL) matter. In a statement, the PSC said it views with interest the settlement and compromise that the GRA has arrived at with DDL over the long outstanding consumption and excise tax issues.
“We wish to congratulate the company on the amicable resolution of this issue, which has been ongoing since 2002 – that is an achievement which took 14 years and is also a credit to all concerned.”
The statement added that from the point of the view of the PSC, “we wish to urge that the Guyana Revenue Authority now engage other aggrieved companies to apply similar (formula) to correct the distortions in the market place resulting from this action.”

The GRA has been criticised for the manner and method of the settlement by Opposition Leader Bharrat Jagdeo, who described it as scandalous.
In a statement last Saturday, Jagdeo had said that the settlement has sent the wrong message to the business community — that a company can unilaterally decide to stop paying taxes while other companies comply with the law, take the matter to court, and drag it out until a sympathetic Government comes to power and settles its debts to the State.
Earlier in last week, DDL had announced that it had reached an amicable settlement to resolve a long-standing 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. However, Jagdeo 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 $10.6 billion. The GRA assessment of $5.392 billion was based on a formula handed down by the court, but yet DDL refused to pay,” Jagdeo stated.
BIG WRITE OFFS
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.
The Opposition Leader said the settlement has opened the door for other companies to seek refunds on taxes paid, claiming that there have already been reports in the private sector of other major companies consulting lawyers about this possibility.
“Management officials from a major local alcohol and beverage-producing company have made it clear, in the past when I was President, that the company would be seeking a refund, depending on the outcome of the DDL matter.”
Meanwhile, the GRA had responded, criticising the former President for labelling the tax settlement as “scandalous.” 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 (than to) 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, he would want to encourage the GRA to continue to operate along those unacceptable lines.
GREAT COST
The GRA stated that the matter had engaged the attention of the Courts since 2002 at great cost to the national coffers and to taxpayers. 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 in sight, 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.

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 per cent that he chose, his G$5.3 billion would have been worth G$1.3 billion to the Government after 15 years.”

The GRA said it found troubling Jagdeo’s objection to its efforts to have an amicable relationship with taxpayers, including those in the business community. It noted 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 [time] create an enabling environment for legitimate businesses.”