GRA has no authority to grant tax waivers on vehicles- lawyers

Jun 11, 2017 News

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Legal minds are contesting claims by the Guyana Revenue Authority (GRA) that it has the power

to grant duty free waivers on vehicles.
A number of lawyers yesterday insisted that in 2003, amended laws took the power out of the hands of Ministers and individuals and made it law under which conditions persons can apply for and be granted waivers on vehicles, equipment and other items.
“I can tell you that based on our current laws, what we have on the books, GRA are the final gatekeepers. They can only act on the tax exemption letters that are issued by the various agencies and ministries which approve the waiver. Once the requirements are fulfilled and met, GRA has to approve it based on the law. They have absolutely no discretionary powers in this area.”
It was explained that persons can be granted exemption letters in different ways as specified by law.
In the mining sector, persons apply to the Guyana Geology and Mines Commission (GGMC). That agency will ensure that the person or company is legitimate and a number of documents, including business registrations, have to be submitted with the application.
Only after GGMC as the regulator is satisfied that the miner has met requirements is a no-objection letter issued. That letter has to be taken with the backup copies of the application to GRA which checks the laws to ensure that person or company is eligible for the exemption.
Only then is the person or company allowed to start the process to clear the vehicle and pay the relevant taxes and duties.
According to a number of lawyers, this is also true for persons in the agriculture sector who are applying for tractors and other equipment, and other heavy duty items, from the Ministry of Agriculture.
In the case of remigrants, the persons have to apply to the Ministry of Foreign Affairs. They have to show evidence of living abroad for at least five years and that they own the items- vehicles and other belongings- for which they want the waivers.
Once the Ministry has satisfied itself, it will issue the necessary letter approving the waiver on duties and taxes.
In the case of investors, the Guyana Office for Investment and other agencies will have to go through relevant procedures before the permission is granted.

For public servants, they have to apply to the Department of Public Service, with the relevant job letter and other backup documents. There are levels of officers who are entitled to waivers for vehicles of different engine sizes.
Judges, parliamentarians, and two of the most senior GRA officials are entitled to the concessions on vehicles which have engine size of over 2000cc (Cubic Capacity).
“The idea was that the powers should not be in the hands of one person. We had a situation in the early 2000s where someone was implicated in abusing the duty free waivers at the Ministry of Finance. That is why we had the law change taking away the discretionary power and made it law the conditions under which it can be granted. It is not about discretion and flexibility.”
According to one lawyer, who is familiar with GRA work, the statements therefore that the agency has flexibility and the discretion is totally wrong and should be retracted immediately.
“Mr. Statia has no such power under the Customs Act Chapter 82:01. He should state for ease of reference the section of the law which empowers him to grant tax exemption that is not in conformity of the law.”
On Thursday, GRA’s Commissioner-General, Godfrey Statia, said that since the authority is a body corporate that reports to a Board of Directors, he allowed a concession to Customs head, Lancelot Wills.
Wills had late last year been refused a waiver on a 2008 Toyota Harrier Sports Utility Vehicle (SUV). The Department of Public Service, to which he had applied, said that the vehicle was over the 2000cc limit to which he was entitled. The vehicle was over 2300cc.
Additionally, the department had objections with the fact that the vehicle was over the eight-year limit. Last year, the administration introduced new regulations to restrict the importation of cars, minibuses and SUVs that are older than eight years.
In writing to the department, Wills was in essence, acknowledging its authority to grant permission.
In January, however, despite being refused, GRA went ahead and started processing the vehicle, apparently using a waiver that Guyana now learnt was granted by the authority.
Wills was allowed to pay just over $180,000 in duties and taxes. The release was signed off on January 16.
Statia said that one day after signing the waiver in January, it was discovered that Wills was not entitled to pay that amount and that it was incorrect. That amount is similar to the rates that remigrants are made to pay on vehicles that are brought in- 10 percent of the value.
However, Wills took two months to correct the situation.
Observers have been harsh on GRA with regard to the incident, questioning what appears to a clear abuse of authority in the granting of that waiver.
With taxes and duties on vehicles a major revenue earner for GRA, overtime, there has been worry that a number of weaknesses in the system have been eating away at this.
GRA’s Chairman, Rawle Lucas, has insisted that GRA’s systems are working and have been tightened during the last two years of this administration.

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