TAX WAR!!! Finance Minister, Chris Ram clash on use of Tax Reform Commission report

Oct 26, 2017 News

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By Kiana Wilburg

It is the Executive which decides when it will implement recommended tax measures, how many it will introduce at any given time, and the ones it refuses to integrate into the tax system.
This is according to Finance Minister, Winston Jordan. Jordan was at the time, responding to Chartered Accountant , Christopher Ram, who criticized him for failing to use many of the recommendations outlined in the report of the Tax Reform Commission.
Jordan reminded that it was the Government that commissioned the report from a four-person committee. The team, which was chaired by NICIL Head, Dr. Maurice Odle, included Ram, Commissioner-General of the Guyana Revenue Authority, Godfrey Statia, and economist, Dr. Thomas Singh.
The report of the Commission was presented to the Finance Minister in January 2016.
“The Government is the client. The four distinguished men would agree that it should be the client who makes available, the report and discussions therein. I don’t believe that the report is owned by any of those individuals. So I was surprised to see Ram giving the impression that it is his report and so on,” Jordan asserted.
He added, “Recommendations and advice given to a client are just that. It is for the client to use any or all of the recommendations or advice given. It is for the client in using any or all…they can use it in full or variants or none of them at all.”
The Finance Minister said that it is also for the Executive to determine which recommended tax measures are economically, socially, politically and financially feasible.
In this regard, Jordan noted that the report of the Commission recommended for there to be a tax on pensions.
“Now where in Guyana would that be socially implementable? Taxing private education caused a furor. Can you imagine what taxing pensions would do? So we refused to do it.”
Furthermore, Jordan made the point that recommendations are divided into what can be implemented in the short, medium and long term. He was not certain if this was done by the Tax Reform Commission. However, the Finance Minister got the impression that Ram wanted the recommendations to be immediately implemented.
He said, “That is something I regret if that is the way it came across with him, because again, it is for the Executive to determine when these recommendations can be used and how fast.”
Jordan added, “We have one Guyana Revenue Authority and they have to implement all of these recommendations as we see fit. At this stage we have already said there will be no new taxes. We will digest these for 2017 and let them seep into the system.”

The Finance Minister said that the Government is expected to make an impact assessment of the previously implemented taxes and beyond 2017, and it will make adjustments where necessary.
Chartered Accountant Chris Ram recently noted that the Tax Reform Commission had compiled in its comprehensive report, a menu of recommendations which should be taken on board to correct gaping holes in Guyana’s tax system.
Ram said, however, that the majority of the Commission’s recommendations remain unimplemented. He strongly believes that there are recommendations in the report which must be given some attention.
He noted that the Commission called for the removal of income tax exemptions granted to certain office holders, such as the President, Attorney General, Chancellor, Chief Justice and Auditor General. He said that for Ministers, Public Officers and Officials, the VAT should be restored on all passenger car imports and the differentiation of cars by age should be removed.
Ram said that there is a need to provide tax incentives, which themselves should be based on clear and rational criteria, through tax laws, which must include provisions for an annual review and withdrawal of the incentives where conditions are not met.
Ram stressed that there is also a need to widen the tax net, and that Government should grant a tax amnesty which could address the presumptive tax.
“Some of the recommendations were expected to be controversial, particularly those designed to have a redistributive effect, such as the reintroduction of estate duty and taxation of dividends above a certain level. There were also some that mixed revenue with social policy such as a tobacco levy and a health levy on alcoholic beverages.”
Ram added, “These are only some of the unimplemented measures available to the Minister of Finance. The Tax Reform Commission had estimated that its proposals, excluding amnesty, government transfers, etc., would be revenue-neutral, but that there would be some rebalancing in the system.”

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