The Story within the Story…Our gatekeepers have failed us

Apr 16, 2017 News

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By Leonard Gildarie 
Last week, I experienced the annual routine of receiving my income tax return form. I have to now get someone to fill it out and submit same to the Guyana Revenue Authority in a few days.

As usual, it is that time of the year that I would wince with pain with the amount that I have to pay in income tax and NIS. I have made peace with the fact that tax is a must. What pains is the fact that so few have to pay taxes for the rest of the pack.
We have a huge problem of tax evasion (illegal nonpayment or underpayment of tax) and non-compliance. There is also another significant problem…scores of Guyanese are under-reporting their true revenues. They rake in millions while paying a pittance.
In the past, Kaieteur News has reported on this worrying issue, as it should be of concern to all and sundry. It is a fact that many companies, some of them large ones, are utilizing some clever accountants to juggle their books.
It is shocking to hear that some owners of minibuses and shops pay as little as $20,000 (US$100) in taxes annually. The shops rake in hundreds of thousands of dollars per year.
There are so many persons, working in the hinterland, as farmers; on the seas, all around the place, who also escape the taxman.
I have some issues with our current tax system but gladly admit that it is a work in progress.
In December, the Guyana Revenue Authority (GRA), the state’s tax collection agency, made some disclosures that should be of no surprise to anyone and be of concern to all.
Commissioner-General Godfrey Statia said that the agency is grappling with the fact that 80 percent of the taxes are coming from 20 percent of the businesses.
Close to 32,000 businesses are also “non-registered” but are active. Those figures are painful, to say the least.
We have so many working class, salaried employees whose workplaces religiously take out those taxes and NIS deductions every time payday comes around. Some of them, including a number of prominent security services, and even the Guyana Sugar Corporation (GuySuCo), never even bothered to remit these to the relevant agencies.
I know of many workers who turned up at NIS after retiring, only to learn that their deductions are not reflected in the records. Many of these retirees end up settling for far less than what they had paid.
I try keeping my pay slips, but many do not. I know workers who have years of pay slips filed in a dusty box or hung on a dusty wire in the bedroom.
So yes, the struggle is real.
On Thursday, a release from the Ministry of Finance spoke of a meeting last week with the Georgetown Chamber of Commerce and Industry (GCCI). Statia, too, was present at the meeting with Finance Minister Winston Jordan. GCCI complained about a number of issues, including the impact of VAT on education and local lumber.
Statia disclosed in a statement that while imports remain stable, the Valuation Department of his agency has observed widespread under invoicing of imported building materials. As a result, he said, the GRA will shortly issue a guideline for importers in relation to its valuation system.
Now, I am not sure about how much of an impact such information would have on citizens. What would be interesting to know is which businesses are involved in such practices and how much, in terms of taxes, is lost as a result.
More importantly, to me a consumer, is whether lower prices have resulted. We import a huge quantity of building materials. From cement, and toilet bowls, to even metal doors, the building materials are in the hundreds of millions of dollars annually in value.
We also, sad to say, have been importing lumber, like pine, which has been competing with our local ones.
The last, for me, should be a sad indictment. There should be no way that our local products should be competing and losing out to foreign products.
It means we have to find urgent ways to cut production costs or close shop.
GRA has been increasingly vocal in recent times. It has to ensure that it does its job. Those taxes that are uncollected from non-compliance and under-reporting have to come in. If you need more staffers, ask for them. We cannot continue to walk the same road. These are serious times. People are feeling it, especially the working class.
The disclosures by Statia would seek to drive home the failures of other revenue-collection agencies in optimizing their campaigns. These agencies should never forget their core reasons for existence – the regulation of their respective sectors and the collection of fees and other payments.
When we fail in this regard, we not only negatively impact upon our national budget projections but fail in our mandate.
Key agencies like the Rice Development Board, Geology and Mines Commission, Gold Board and Forestry Commission, to name a few, have to be fully aware of and reminded constantly of the bottom line.
We have managed to use the powers vested in us to benefit friends and failed to ensure we collected what we are due. We have allowed short-term greed to rob the country’s progress.
Having said all of that, it does not mean we have not done well within the past decade and a half. We have realized a few key projects like the Berbice Bridge, albeit questions over the financing structure. We have created a class of entrepreneurs that should be fostered and consulted.
For me, perhaps the most important thing that we should look at as we move to oil is the fast-tracking of legislation that would ensure our locals are trained and our country gets the best deal possible. There is a draft local content policy, we are told. That is good news.
We should conduct a study focusing on investments we received over the last 20 years, the benefits that were given out and what we received in return. The findings would help in charting our course forward when it comes to ensuring we maximize our potential with respect to our natural resources.
Our gatekeepers at the regulatory agencies like GRA play a key role, and have to be put on notice that all stops are to be pulled out in realizing their respective mandates.

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