—SBB working to get more businesses ‘formalised’

BEING tax-compliant and insured are essential requirements for citizens, but the Small Business Bureau (SBB) has found that many businesses do not have Guyana Revenue Authority (GRA) and National Insurance Scheme (NIS) compliance certification.

“Guyanese businesses need to get on board; follow the law… You have to be GRA-compliant, because if you are going to benefit from roads, schools and hospitals, it is only fair that you pay your fair share of taxes… The same thing for NIS; it is a contribution for yourself and employees,” said SBB Chief Executive Officer (CEO), Dr. Lowell Porter during an exclusive interview with the Guyana Chronicle on Thursday.

The mission of the GRA is to promote compliance with Guyana’s tax, trade and border laws and regulations, through education, quality service and responsible enforcement programmes, thereby contributing to the economic wellbeing of the people of Guyana.
On the other hand, NIS is a compulsory, contributory-funded social security scheme, offering financial protection to employees and their families, in case of loss of earnings through an injury at work, incapacity, retirement or death of the insured.

According to Dr. Porter, there was a business which the SBB utilised often that did not have NIS compliance, because the employer claimed that he did not have employees.
“We want people to know that even if you are self-employed, you are responsible for paying tax and contributions for yourself,” he said.

Dr. Porter said that there are many more businesses which are not compliant; some of which have even tried to apply for a grant from SBB’s Small Business Development Fund.
Many of the applicants have business registration, but they cannot get GRA and NIS compliance for some reason or the other, so they are disqualified right away.

“We are stuck between a rock and a hard place, because they are not compliant and we want to help; these things hamper the programme,” Dr. Porter lamented.

He wants to encourage businesses to get compliant, because if they cannot show compliance, they would not be able to access certain benefits from the SBB.
Although compliance is important, he said, it is difficult for some small and ‘micro’ businesses to become tax and NIS-compliant because those are people who might have never submitted a tax return.

In that case, Dr. Porter said if someone is a revenue earner, they should at least submit a tax return, since it is required by law.

“Nevertheless, we are trying to put people in the system; we are trying to get more businesses formalised,” he said, adding that it is a slow, painstaking process which is new to a lot of small businesses, but at the same time, the SBB wants to encourage them to get up to speed.

One of the initiatives which are geared at formalising businesses and sensitising entrepreneurs is the recently launched “I am ready for entrepreneurship” programme.
Through the programme, persons, who are not necessarily clients of SBB, can get educated on the requirements for doing business in Guyana.

Dr. Porter said if persons choose to accept the requirements and pursue business, the SBB would put them on the right path.

“We do not have endless resources to be meeting everybody and making everybody an entrepreneur, but once you agree, there is a programme you have to follow, we need to have access to you,” he said.

Among the resources which the SBB possesses is the Small Business Development Fund which, for the first time, was funded in 2018. A sum of $100 million was budgeted for under the fund, in the 2018 budget.

The intention of the SBB was to utilise the money to create a lending arm and a revolving fund so that businesses, which would not meet the bank’s criteria, can benefit from small, short term loans.

The project did not kick off because the proposal had some issues, said Dr. Porter, adding that the SBB instead asked that the money be used for grants.
So far the SBB has disbursed 24 grants from the fund, but the plan this year is to establish the lending arm.

“My guess is because of the situation with no Parliament things cannot go forward, the money is used right now for grants,” he said.

According to Dr. Porter, there are 303 applicants in the system who have to go through the process and be scrutinised before they can access a grant.

Any business whether start-up, expansion or change of business, would be eligible for a grant as long as they never had one before.
Many persons have become dependent on a grant to start or expand their business, since in most cases access to finance is a challenge to small businesses.

Financial difficulties are, however, not the only challenges which small businesses face. According to Dr. Porter some business owners complained about not having consistent access to raw materials and packaging materials.

“We are here because we understand what small businesses need…on the flip side I strongly believe that entrepreneurs must have drive and determination to succeed, we can only provide the launching pad,” said Dr. Porter, adding that the bureau has established help-desks in almost every region, to provide assistance to businesses.
Despite the challenges which businesses face, he said most of them tend to survive and even grow locally.

Dr. Porter said a survey, which was done last August, found that 78 per cent of SBB’s over 9,000 clients, were still around.

“That is extremely impactful…a lot of people depend on their businesses for survival…small businesses here in Guyana are determined,” he said.
Considering their determination, Dr. Porter believes that the SBB needs to find mechanisms to support the growth and development of businesses.