IMF’s scathing report reveals worrying concerns about GRA’s administration

Dec 20, 2017 Letters

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DEAR EDITOR,
I read with some consternation, the International Monetary Fund (IMF)’s D grade rating of GRA’s administration. In June 2016, I made a presentation to GRA’s Board of Directors, entitled “How I Envision the Operations of Guyana Revenue Authority Moving Forward”. This Report was also made available to a number of senior Cabinet Members.
The Report dealt with the functions of GRA as laid out by Section 10 of the Revenue Authority Act. For practical purposes, I divided these functions under the following heads: 1.Assess, charge and levy revenue 2. Collect revenue 3. Safeguard and advise Guyana’s best interest with respect to international taxation arrangements and local revenue matters 4. Promote full awareness in society of the rights and responsibilities of revenue payers 5. Effective and efficient administration of the Revenue Authority.
In this article, I highlight some of the issues I raised and recommendations I proposed to GRA in connection with its administration under point 5 above.
The success of the Guyana Revenue Authority will be judged by how well it satisfies its constitutional mandate. Its mission is to administer tax and ensure compliance so that all taxpayers contribute their fair share to the economic and social well-being of all Guyanese. It must commit itself to deliver world-class tax administration that is responsive, effective and trusted.
All its employees (executives, managers and other employees) should be familiar with and subscribe annually to a Code of Conduct and ethical principles and abide by them both in letter and spirit. The code will include the following:
– Foster a culture of trust and integrity
– Protect the privacy and confidentiality of taxpayer information
– Build and protect GRA’s reputation of impartiality, professionalism and excellent client service
– Avoid conflict of interest situations
– Promote a healthy and respectful work environment
– Stewardship to effectively and efficiently use and protect entrusted resources
Where employees have information indicating serious breach of the Code, they should be able to bring this matter, in confidence without fear of reprisal, to their up-line and other dedicated authorities. If an employee does not abide by the Code, they should be subject to disciplinary actions, including termination of employment.
The Authority should embark on a Modernization program with the twin pillars:
– Automation of its business processes and information systems. Certain filings, such as VAT and PAYE can be done electronically; payments can also be done directly by implementing a My payment system. This will be a precursor to further automation such as the taxpayer having access to viewing their account and filing Income Tax Returns electronically. With the rapid and expansive use of emails, GRA can embark on a program to issue correspondences to taxpayers by authorized and secure email rather than by paper mail. This is becoming the norm with many Revenue Authorities.
– Statistics and Analytics as a management tool to ensure that GRA is planning and conducting its activities in a risk assessment and goal-oriented manner and to track GRA’s progress. This will require effective information system to provide timely accurate data to make informed management decisions.
The effectiveness of GRA as the tax administrator can be measured by:
– Number of compliances processed
– Revenue collected
– Its operational cost as a percentage of say $100,000 collected
– Customer satisfaction
A risk analysis of the Authority’s internal administration will concentrate on such matters as:
– Its technical capacity building to cope with current and future needs. All areas, including management, audits, assessments, collection, legal action, international/cross border operations, research and statistical analysis must be considered
– Its human resource, including fair employment practices, remuneration, training, promotion and advancement, pension and retirement, job satisfaction and discipline
– Its transparent and fair purchasing and contracting practices
– Its own accounting for its income and expenses, assets and liabilities culminating in a clean audit report for its operations (internal report)
– Reporting of its mandated functions (external report).
An annual and longer-term Corporate Business Plan will be prepared at the beginning of each year with opportunities for roll forward changes to be incorporated. The plan will incorporate Government policies, GRA’s own research/analytics/statistics, taxpayers, tax practitioners and other stakeholders interests. It will take the form of a budget with the quantitative risks, actions, costs, expected results/indicators and actual results/indicators. It will outline GRA’s strategic priorities of the deliverables:
– Compliance and Assessments and Appeals
– Collections and Enforcement
– Taxpayers education and Advice
– Advisory – Government and Taxpayer/Business Assistance
– Internal Services – People, Modernization, Integrity and Service
Guyana Revenue Authority has a golden opportunity to take its rightful place as a world class outfit of integrity and excellence. I trust that GRA will seize the opportunity, although the IMF Report casts a long shadow over its administration.
I will address GRA’s other functions, including a Taxpayer’s Bill/Charter of Rights, in future articles.
Tameshwar N. Lilmohan
Chartered Professional Accountant

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