There is a big case for tax amnesty in Guyana

Jun 26, 2017 News

– GRA Boss

By: Kiana Wilburg

Commissioner General of the Guyana Revenue Authority (GRA), Godfrey Statia is open to the idea of granting tax amnesty.
In fact, he believes that there is a big case for it in Guyana. He noted, however, that before this is done, a number of factors need to be taken into consideration.
Statia told Kaieteur News that while there has been talk of a tax amnesty, there are different types in which this measure can manifest itself.
He explained that there can be tax amnesty for those employers who have not been paying the Pay As You Earn (P.A.Y.E); there is tax amnesty for those taxpayers who have not been paying or not complying; and there can be one for those who actually owe arrears in taxes.
In the case of the latter, Statia explained that those persons would be granted a particular time within which they would have to pay their taxes in return for waiving penalties and interests.
The tax chief also noted that a tax amnesty can also be in the form of giving taxpayers who can’t pay off all the taxes owed, the opportunity to pay a percentage of what is owed within a certain time frame.
The Commissioner General said that these forms of tax amnesty can happen individually or simultaneously.
Statia said, “The first thing you need to do is calculate the cost to the economy for each one of these measures and then you decide. You also need to understand that tax amnesty doesn’t work when you do it too often. You have to decide the type you are going to give, calculate the amount you are going to get back and how often you are going to do it because if people get accustomed to tax amnesty, they would not comply and they would just hope for the next tax amnesty.”
The Commissioner General continued, “If you give a tax amnesty, it must be a once and for all tax amnesty that will make people comply and thereafter if you find that people are not complying then that is when you penalize them.”
Statia told Kaieteur News that he has been in talks with the Institute of Chartered Accountants of Guyana (ICAG), in relation to granting tax amnesty.

GRA Commissioner General, Godfrey Statia

“I have been in talks with the ICAG and they have been asking me if I am prepared to give a tax amnesty so that they can advise their clients to put their houses in order.”
He added, “A tax amnesty can work. I am open to it. But whenever you finish, it is a political issue. You have to check and see what would be the returns before you grant it…but there is a very big case for it in Guyana.”
The Tax Reform Commission (TRC) which was established by the Granger administration in 2015 was the first to recommend a tax amnesty.
According to the report by the Commission, a tax amnesty is one way to obtain taxes that have not been paid and to bring new taxpayers into the tax system. It noted, however, that any amnesty must be coupled with increased resources being devoted to enforcement, together with increased penalties for failure to comply with the tax laws.
The TRC had recommended that tax amnesty should have been offered since last year whereby errant taxpayers who understated their income and failed to pay their rightful tax can do so without the fear of penalty and court action.
The TRC said that this action together with the emphasis on Debt Collection should increase revenue significantly, while, at the same time, resources can be directed towards proper valuation and identification of the wealth.
It added that failure to take advantage of the amnesty would result in significant penalties being levied when caught within the tax net.
Further, the report said that the grant of a tax amnesty for all errant taxpayers should end within a maximum of 180 days.
The TRC recommended that the granting of a tax amnesty not only brings in substantial tax revenues in the amnesty period but sets a benchmark for annual flows of taxes from persons who had previously slipped out of the tax net.

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