GRA admits container checking system not yet perfect

Jun 09, 2010 News

---

-refutes KN’s scam report

The Guyana Revenue Authority (GRA) says it is working to perfect its system of checks on imported containers to further detect unscrupulous acts such as under valuing, false invoices being used and improper classification, all of which contribute to substantial loss of revenues.
The agency made the revelation yesterday in a press statement refuting a story in last Sunday’s edition of Kaieteur News headlined “GRA containers’ scam busted……Two senior officials transferred during probe.”
In urging the newspaper to desist from publishing “misleading, malicious and fabricated stories about the organization”, Commissioner-General (ag), Clement Sealey, said that the story should have been verified with management before being published, since it is having a negative impact on staff.
GRA said that it has a “very vibrant internal audit department which constantly runs checks, both to prevent such activities and to curtail the operations of those who would even contemplate the idea of committing fraud.”
It was further pointed out that the robust audit system of the GRA has served and is serving to expose those persons, whether internal or external, who would have been undetected in the past and who would have felt very comfortable and perhaps complacent that they would never be detected.
Sealey explained that one of the main challenges that the Customs officers face during their daily operations is that importers who lodge their entries complain about the time it takes to have their goods released.
According to Sealey, in excess of 4,500 entries are processed by the Customs on a monthly basis and while the majority of these entries are processed and payments made initially to have the goods released within one to three days, a few are subject to other processes.
These processes “are being perfected that give rise to the detection of unscrupulous acts such as under valuing, false invoices being used and improper classification all of which, contribute to substantial loss of revenues that go undetected every day. It must be emphasized that this happens all over the world and is not peculiar to Guyana.”
GRA stressed that since the introduction of the Total Revenue Integrated Processing System (TRIPS), there has not only been a remarkable improvement in the processing time of entries lodged at the Customs and Trade Administration but also the level of detection of such practices.
Sealey, in the statement, said that he is not aware of any senior officers being sent on leave or any massive fraud being detected, which according to the newspaper article has resulted in millions of dollars in loss of revenue.
Kaieteur News in the article did not say that any officers were sent on leave but rather that they were transferred to other departments.
The statement did not confirm or deny this.
“It must be emphasized too that the declarations made for the clearance of goods are done by the business community and any suggestion of fraud has to be first addressed by those external stake holders before any acts of complicity can be directed at the GRA.”
GRA suggested that it “may be appropriate” for Kaieteur News to carry out a survey to determine at what values goods are being declared by the multitude of businesses in this country based on country of origin and different categories of goods “starting with newsprint and printing ink”.
According to Sealey, this information should be published so that the public is better informed of “who is unscrupulous”.
The statement acknowledged that while it is likely that agencies such as the GRA will be susceptible to temptations thereby leading to fraudulent attempts, it is important to note that the systems in place have the ability to detect these.
It was stressed that the organization continues to grapple with unscrupulous businesses and individuals and cautioned reporters to be more responsible in their reporting and not to lose sight of the ‘culture’ under which the GRA operates.
“…GRA alone cannot change it, but rather the society at large needs to be engaged in stamping out corruption.”
Sealey said the GRA would continue to work above board and put systems in place to ensure transparency throughout its operations.
On Sunday, Kaieteur News reported that millions of dollars in revenue has been lost at GRA in a fraud in which scores of containers were believed to have been released without any mandatory checks made by Customs officials.
Well-placed sources had said that the Internal Affairs Department has been investigating.
Kaieteur News was told that management at GRA was made aware of the fraud about six weeks ago and it is believed that a number of businesses colluded with staffers to evade paying taxes on the containers.
It was explained that the Customs and Trade Administration has an assessment procedure that would red-flag risky businesses that are shipping containers into the country. This assessment is based on how long a particular business has been shipping and its credibility with GRA.
Additionally, GRA is mandated to make a percentage check on all shipments made into the country. These checks would be red-flagged in the computerized TRIPS.
For some reason, the report indicated, a number of containers that should have either been assessed as risky were allowed to leave without any checks.
It was unclear whether there were collusions in the IT Department, which is tasked with recording transactions into TRIPS.
While not going into details, sources told Kaieteur News that GRA management was alerted to the scam after a number of businesses, on their shipping documents, listed particular goods for which they paid the equivalent taxes. But it was discovered that other goods were actually brought in – goods that would have attracted a significant amount of taxes.
“For example, a business may list toilet paper but actually had some TVs and other items. Who knows what other things were brought into the country. It is worrisome,” one Customs official said Saturday.

---

---