Gold miners worry that tax measures will send industry underground

Dec 08, 2016 News

Small, medium and large scale gold miners are concerned about budgetary measures. Particularly, the businessmen are worried about how the new tax measures will affect their businesses.
At a recent press conference, the Private Sector Commission (PSC) on behalf of gold miners, said that little is being offered to miners in the 2017 Budget. PSC’s Ramesh Persaud pointed to the proposed repeal of a section of the Income Tax Act.
In his Budget speech, Minister of Finance, Winston Jordan, spoke about the new tax measures. He said that there will be a “Repeal of Section 33E (4) of the Income Tax Act as it relates to the sale of gold or diamond not being taken into account in ascertaining the chargeable income of the persons who owned gold or diamonds.”
Jordan told the House that the repeal seeks to bring these operators within the purview of all the Tax Acts.
Persaud said that this provision will prove “burdensome to small miners and mining companies and not practical to implement.” He said that it can contribute to the industry going underground.
On this same measure, the Guyana Gold and Miners Association (GGDMA) said that the government must be reminded why this section of the Tax Act was inserted in the first place. “It was in pragmatic recognition, by former Commissioner Heyligar of the difficulties for the porkknockers in the bush (interior) to keep proper books in place and to strike a balance between commonsense and revenue collection. This action is a retrograde step.”
Jordan had also announced an increase in the Tributors’ Tax from 10 percent to 20 percent.
Jordan said that the tax on tributors has remained unchanged, since its inception in 1998. He told the House that the increase, which is in line with the withholding tax, is the first step to removing distortions and multiplicity of tax rates.
Speaking about this measure, Persaud said, “This will significantly reduce the disposable income of mine workers and miners. It is also not practical to implement. It can contribute to the industry going underground.”
GGDMA said that this agreement was in place “again because of the pragmatic recognition by Heyligar of the difficulty of treating tributors who are migratory, almost itinerant workers meandering from dredge to dredge as employees and to strike a balance between revenue collection. This is also a retrograde step.”

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Gold miners worry that tax measures will send industry underground

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