80% of registered companies failed to submit returns in 2011 - Auditor General

80% of registered companies failed to submit returns in 2011 – Auditor General

Oct 27, 2012 News

More than 80 per cent of the registered companies failed to file mandatory annual returns in 2011, according to state auditors.
Under the Companies Act of 1991, companies are required to file annual returns from the year following their incorporation and to pay a filing fee of $800.
Any failure to comply in this regard carries a penalty of being struck off the Companies register and being deemed an invalid company.
But non-compliance continued to dog the system which is managed by the Supreme Court Registry. The registry falls under the Ministry of Legal Affairs.
In 2010, there were 223 companies that registered and were required to file returns in 2011. “However, only thirty-four companies complied with the requirements of the Act.”
The registry, as a result, sent default notices to 126 companies of which 50 were struck off the register and 62 were not required to file returns.
A similar observation was made in relation to companies registered in previous years, particularly the years 2007 to 2009, which accordingly required 243 returns in 2008, 236 in 2009, and 244 returns in 2010, based on the number of registrations.
The Auditor General found that records indicated that the responses were “negligible” prompting the Ministry to send out notices of default, together with action to strike defaulters off the register. But while there were results, the majority remained in default.
Government has been battling non-compliance for years now, problems from annual returns and even contributions of the National Insurance Scheme. Security companies, some linked to Government officials, have been accused of being among the chief culprits.
While the Guyana Revenue Authority and other government agencies continue to fight an uphill task to ensure companies meet their legal obligations, issues like manpower shortages have not been helping.
There have been criticisms of many workers, mainly in the private sector, not submitting returns and not paying their taxes and other dues.
Meanwhile, proper record keeping or rather the lack of it was also a problem for the Ministry with the Auditor General report finding that many of the business registration applications were misplaced.
“During the reporting period (2011), 5,209 applications were received, 93 of which were not surrendered for examination. Similarly, the Ministry also failed to present a number of applications for the years 2006 to 2010, which resulted in the fees payable on these not easily verified.”
The Ministry, in explaining the missing applications, said that storage remains a major problem at the Registry but attempts are underway to back up records electronically at the Business Registration Unit.

Pic filed as auditor general report
The 2011 Auditor General report has said that more than 80 per cent of companies that registered in 2010 failed to file annual returns last year.