Tax amnesty

Dec 06, 2017 Features / Columnists, Peeping Tom

The so-called tax amnesty is really an amnesty on penalties and interest. It allows individuals, firms and companies who have not filed their returns or paid their outstanding taxes to do so without incurring the severe penalties which are imposed under the law and which have been increased since the Granger administration took office.
The opposition is suspicious of the announced tax amnesty. They feel that there is something surreptitious afoot. So the question has to be asked as to just who benefits from the tax amnesty.
The Pay-as-You-Earn (PAYE) workers have their taxes deducted at source. So it is not likely that many of them are going to owe the taxman massive taxes on which penalties and interest are to be calculated.
Those therefore benefitting the most from the amnesty will be those persons and companies who owe millions on which the penalties and interest have to be calculated.
The amnesty therefore will disproportionately benefit the large tax defaulters than it will the ordinary worker. And this precisely is the basis of the suspicion of the parliamentary opposition. They suspect that this tax amnesty is intended to help some big company and businessman aligned to the ruling coalition.
The truth of the matter is that the outstanding taxes still have to be paid. The penalties for late submission of returns or outstanding taxes have always been punitive but have become more so under the present government. These penalties are self-defeating.
This is so for the GRA and it is for the City Council. The Council is offering an amnesty on interest to defaulting ratepayers. That makes sense since all ratepayers benefit.
The interest on outstanding rates is a problem for delinquent ratepayers. There are businesses who for one reason or the other may have not paid their rates for a few years. When they do decide to pay, they find that the interest is so prohibitive that they cannot afford to pay. And so they do not pay and the interest becomes compounded and the overall amount owed skyrockets. They eventually lose the property.
The rates on properties used as businesses in the City are extremely high. It is far too high. It is that way because there is cross-subsidization of residential ratepayers whose rates are very low indeed and who have a high delinquency rate.
Many businesses want to put themselves in order but cannot because of the amount of interest which they owe. They cannot afford to pay this sum. And so the Council loses also when the businesses cannot afford to pay the interest on the back rates. The amnesty offered by City Hall therefore makes sense. It will help all concerned.
The same cannot be said of the amnesty announced by the Minister of Finance. That amnesty will not prevent the Guyana Revenue Authority (GRA) from squeezing taxpayers.
Anyone who has had to deal with GRA knows that you do not put a lime into the hands of the taxman. By the time he finishes squeezing that lime, not a drop of liquid is left in its cells. Similarly when the GRA is finished with your pockets, they are bone dry.
A businessman on his deathbed called his friend and said, “John, I want you
to promise me that when I die you will have my remains cremated.”
“And what,” his friend asked, “Do you want me to do with your ashes?”
The businessman said, “Just put them in an envelope and mail them to the
Guyana Revenue Authority and write on the envelope, “Now you have everything.”
Tax penalties are intended to be disincentive for people to avoid not paying their taxes or filing their returns late. But it has had the opposite effect. It has become so prohibitive that it actually discourages people from paying their taxes.
It is very much like the penalties for traffic offences. Instead of reducing road violations, it actually encourages them since it is cheaper to bribe the corrupt traffic cop than pay the fine.
Last year, the Minister promised firm action against tax dodgers. But he must have now recognized that the penalties and interest which have to be paid are so high that many people simply do not pay because it would leave them penniless.
The amnesty on penalties therefore is an offer being made to ask defaulters to put themselves in order without going broke.
Who will be the main beneficiaries we do not know. Time will pronounce on that one.

Latest News

Tax amnesty

Related

Similar Articles

The Glenn Lall Show|| April, 11th, 2025

Follow on Tik Tok @Glennlall

THE BLUNT OF THE DAY

Sports

FL Sport provides financial boost to Guyana U-15 quartet

Guyanese golfers Hussain, Arjune to attend 2025...

Quarterfinal showdowns set in Milo/Massy U18...

Lusignan Golf Club: A Premier Destination for...

Paul misses century as Red Force trail by 122

National 9-Ball Pool championship cues off today

Features/Columnists

Mashing an ants’ nest

The U.S. “Joining” the Commonwealth: an unreasonable expectation

Relax, fellow Guyanese

Publisher’s Note

Weekend Cartoon

Bridge Watch

Demerara Harbour Bridge

> Berbice Bridge […]

Tax amnesty

Share this:

Related

Similar Articles

The Glenn Lall Show|| April, 11th, 2025

Follow on Tik Tok @Glennlall

THE BLUNT OF THE DAY

Sports

Features/Columnists

Publisher’s Note

Weekend Cartoon

Bridge Watch

Demerara Harbour Bridge

> Berbice Bridge […]