CITIZENS Bank has objected to the Notices of Assessment (NoA) issued by the Guyana Revenue Authority (GRA) claiming additional corporation taxes of $534, 416,000.

The issuance was made on December 20, 2018, by the revenue authority on the basis of a disallowance of the company’s claim for deduction for impairment losses on financial assets in relation to the years of income ended 30 September 2010 to 2012.

However, Director of BANKS DIH Limited, Clifford Reis, at the company’s Annual General Meeting on Saturday, said that the bank, which is a 51 per cent owned subsidiary of BANKS DIH, is currently ironing out the issue with the GRA.

“The first step in any programme is not fireworks,” he said. “We wrote them back and said we don’t agree and that was called an objection. So far we’re still having dialogue to see where we go; where we don’t go and see if we can solve the problem between us,” Reis said.
Citizens Bank maintains that it had adhered to its obligations contained in the International Financial Reporting Standards (IFRS) and the Supervision Guidelines issued by the Bank of Guyana.
“For purposes of its corporation tax computations, the company’s impairment losses on financial assets as determined under IFRS, were claimed as deductions in accordance with Sections 16 (1) (e) of the Income Tax Act, which provides for the deduction of provisions for bad and doubtful debts incurred in a trade or business,” the statement said, adding: “As [a] consequence, the company is not in agreement with the assessment raised by the Guyana Revenue Authority and intends to file objections, as provided for under the Income Tax Act.”

Reis told reporters that Citizens Bank is not alone when it comes to the matter as other banks are also in the same position.

“It’s not Citizens Bank alone, it’s all the banks. All the commercial banks in Guyana received an assessment,” he said. “And I’m surprised that some of the other banks that have not notified their shareholders.”

However, he did note that some of the other banks had completed their annual general meetings prior to receiving the notice.

As such, Reis added: “Those who are coming up now with their Annual General Meetings, I hope that they will make such representations.”
For 2018, the Bank recorded $602.3M in after-tax profit for the performance period ended September 30, 2018.

As to why he placed importance on disclosing the current challenge, the Director said that it was done out of consideration for the bank’s stakeholders.

“Being a material number of $500M, it is my right, as the Chairman, to tell the shareholders about it because we don’t want them to be surprised one morning when they wake up to see a liability of $500M,” he explained, continuing:

“But I think we [along with the GRA] will solve the problem. I don’t think it will go beyond this dialogue.”