GRA finds database flooded with dead people, bogus accounts and migrants

Jan 24, 2018 News

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– to remove over 100,000 accounts by March

By Kiana Wilburg

The Guyana Revenue Authority (GRA) is set to begin a data-cleansing exercise which will see tens of thousands of accounts being removed from its tax

register. This is according to Commissioner-General, Godfrey Statia.
The tax chief noted that the exercise is necessary, since there have been complaints regarding a duplicity of Tax Identification Numbers and other records. Statia said that there are over 100,000 taxpayers who are on file but shouldn’t be.
The Commissioner-General said, “When they were doing data conversion in the first place, they brought the old database into the new one without cleaning the system of those who died, migrated or people who don’t exist etc. And we have been finding these things. There are a lot of things which need to be straightened out in this regard. The records also need to be cleansed so there is a smooth transition when it is to be married with the lists of the Guyana Elections Commission (GECOM), the National Insurance Scheme (NIS) and the Passport Office.”
Statia said that the process is expected to be completed by March.
The Chartered Accountant explained to this newspaper that the culprit behind the database being congested with unnecessary accounts is the Total Revenue Integrated Processing System (TRIPS). He noted that the system is riddled with errors, since it was not implemented from the inception with all the accompanying modules. This state of affairs existed for more than 10 years.

ACCURACY AFFECTED
The system at GRA even affects the accuracy of the annual reporting that is done by Auditor General, Deodat Sharma.
For example, the Audit Office reported that for 2015, there were 1,509 taxpayers registered with the Guyana Revenue Authority who failed to file returns. It was recommended that the Authority put systems in place to ensure that taxpayers comply fully with the requirements of the Value Added Tax (VAT) Act concerning the filing of returns.
When GRA officials appeared before the Public Accounts Committee (PAC) to answer burning questions on the matter, it was revealed that the number of taxpayers who failed to file returns was 766 and not 1,509. It was explained to the Committee that the recorded 1,509 included persons that were de-registered and those pending de-registration from GRA.
Based on steps taken to have the defaulting taxpayers file their returns promptly and comply with the requirements of the VAT Act, it was said that a letter of demand is usually sent to the various persons asking for the submission of the returns.
Commissioner-General Statia had also informed the PAC that if reports are taken from the system, a lot of errors would be recorded. As such, the GRA boss said that there needed to be some reconciliation with what has been transpiring in the TRIPS and what is being done manually.

Statia was asked if the reconciliation could not have been done at the time of the audit. He said that it should have been addressed. Statia said that there were a number of issues which needed to be addressed prior to the report being done, that were not dealt with. He said that he was aghast when he realized that a number of issues were not addressed.
Statia became the head of GRA in July 2016. He said that if corrective actions were taken, these errors would not have found their way into the Auditor General’s report. He said that the TRIPS will continue to be riddled with errors until it is fixed.
Further, the tax chief said that when he took office as Commissioner-General, he immediately summoned the Crown Agents responsible for the TRIPS. He said that what was found was that the Crown Agents were looking at TRIPS in an all-encompassing way. According to Statia, the GRA prefers the system to be implemented by module.
Statia said that if this was done, VAT, Customs and certain parts of internal revenue would have been working well. However, he said that the agents were instead working to ‘turn-up’ all the systems simultaneously.
He said that instructions were then given to cease and to be provided with a timeline of the modules being ‘turned-up’. He said that when this was done, the GRA prioritized which module should be implemented first.
It was found that the internal revenue modules made more sense to implement first. Hence, attention was placed on the internal revenues which enable the GRA to do operations such as E-filing and adequately look at assessments of returns.
He said that in the case of VAT, there are less than 4,000 persons, of which close to 1,000 should have been de-registered. Statia said that it was decided that the manual system would have worked best in conjunction with what TRIPS had to offer. As a result, TRIPS is now moving to a place where it should be, Statia said.

TAX REFORM REPORT
The Commissioner-General also noted that the National Tax Reform Report also supports the need for the records of GRA to be merged with the National Insurance Scheme and other agencies.
The report notes that based on the comparison of data, there are significantly more employees contributing to NIS than paying tax to GRA. The report said that part of this difference is attributed to the fact that many of the NIS employees may have temporary employment or low income employment which is subject to NIS, but not PAYE deductions. As at December 31, 2014, the NIS reported some 116,467 active employees while the corresponding number of employees who filed income tax returns was 66,497.
The Tax Reform Report states that the administration for the collection of NIS contributions should be handed over to the GRA. It also recognizes the merit of any consolidation exercise between the two agencies.

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