2016 Auditor General report finds …GRA fails to submit records to support $30B in exemptions to businesses

Nov 04, 2017 News

Auditor General, Deodat Sharma, is disappointed that the Guyana Revenue Authority (GRA) has failed to produce records to support $30B in exemptions it gave away to businesses last year.

Auditor General, Deodat Sharma

In his latest report, Sharma noted that tax exemptions granted to companies were equivalent to 54 percent or $30.287B of the total exemptions granted for the year 2016. Sharma said that total exemptions came up to $56.073B.
The Auditor General noted, however, that the total value of tax exemptions granted in respect of Investment Agreements facilitated through the Guyana Office for Investment and the Guyana Geology and Mines Commission could not have been determined.
In this regard, he said that a review of the records of the Authority revealed that a total of 59 agreements in respect of 41 investors were approved during the year 2016.
The Auditor General said it should be noted that in accordance with the Investment Act of 2004, a procedural audit of the incentives granted to an investor or an investment enterprise is required to be carried out annually by the Auditor General.
He noted however, that no records or documentations were submitted to facilitate these audits.
GRA, in response, said that the categories of tax exemptions in the report are those that were built into the system several years ago and are subject to limitations. Nevertheless, it said that the IT Division is in the process of implementing a system that will facilitate a breakdown of the ‘Companies/Businesses’ category so that more informative reports can be generated.
The Audit Office recommended that the tax agency submit for audit, the reports once available.
Sharma noted that exemptions from duties and taxes totaled $56.073 billion for the period under review, as compared to $92.425 billion in 2015. He said that this represents a decrease of $36.352 billion over the corresponding period.
Notwithstanding this, Sharma said that the value of revenue foregone for the year 2016 represents 36.89% of actual revenue collections by the Authority. In addition, tax exemptions of $26.399 billion granted in respect of Customs and Trade Taxes exceeded actual collections by $10.017 billion.