Tax returns were not reviewed for years

Mar 25, 2018 News

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…GRA Boss says system now being corrected

After conducting some internal assessments, the Guyana Revenue Authority (GRA) has found that for several years, tax returns were not reviewed.
GRA’s Commissioner General, Godfrey Statia, recently confirmed this in an interview with Kaieteur News. He said that the system governing tax returns was flawed and steps have been taken to correct it.
Statia also explained that businesses have been slipping under the radar with regard to their operations for some time. He said that there are several factors which should have been looked at by the authority but they were ignored.
The Commissioner General said that based on the files of certain companies, assessments are supposed to be done on the major shareholders, the related parties who are doing the supplying and the directors “because you are looking at inter-company transactions and so forth”.
The tax chief said, “What you had over the years is that the people were not doing a review (of the statements coming in). The system was flawed. So the information came in, went into TRIPS and the return was filed. But you skipped a step…”
Statia added, “We have found companies saying they are noncommercial when they are commercial…In that case; you are robbing the nation 10 percent of the taxes you were supposed to pay. These are some of the simple things that you pick up every day.”
Statia noted, however, that with an efficient IT system, the GRA would be in a position to look at the industry’s norms and make the necessary comparisons.

FLAWED IT SYSTEM
The Guyana Revenue Authority failed to implement critical parts of an IT system for almost ten years. The consequences of the entity’s actions in this regard contributed to billions of dollars in revenue leakages and even rampant corruption.
Statia is now racing to implement measures that would bring an end to unjust practices that resulted from the GRA’s past actions.
Statia explained that the IT system referred to as the Total Revenue Integrated Processing System (TRIPS), was intended to merge all departments by having a common database where all tax records could be scanned or entered into the system and found when needed.
It was introduced with the aim of boosting efficiency in the assessment, collection and accounting for revenue.
TRIPS comprises of two core applications: Taxes and Customs, which share information with each other and each application encompasses a total of 13 modules.
The CUSTOMES MODULES include Lodgment; Data Entry; Goods Inspection/Enforcement, Valuation and Document Check, Risk Profiling, Cashiering, Release, Remissions, and Warehouse.
The TAX Modules include Taxpayer Identification, Tax, Accounting, Audit, Reports/Notices/Certificates.
Statia noted however that since all of the modules were not implemented, the “TRIPS system was just tripping.”
The GRA Commissioner General said that the Authority has been trying to implement TRIPS completely since 2007. He said disappointingly, that the entity spent over US$4M on the IT system and it is still not up to date.
Furthermore, the TAX chief said that the failure to implement all of the modules affected the entity to a large extent.
He explained, “In the olden days, it used to be a manual system and it worked up to a particular point. So you know for sure that if TRIPS is in place, the IT system would help you to do a lot of these things. If you have the right IT software, half of your work is completed.
“You would be able to do proper audits and these things, and at the touch of a button you would be able to recognize what is wrong and what is right; whether a taxpayer has complied…”
The Tax Chief continued, “Unfortunately, you can’t do that with the present system and that has gone on for the last 10 years. That was probably one of the reasons why the GRA has been in such decay. It was in a state of decay.”
Statia added, “What I did now is instead of them using an entire TRIPS system, I said, ‘Concentrate on the internal revenue modules.’ And we are going to go to the Automated System for Customs Data (ASYCUDA).”
The GRA Commissioner General said that the ASYCUDA system will cost just about US$2.5M.
As for TRIPS, he said, “We must get something out of what we have paid for, so while we are moving to ASYCUDA for customs and we will keep (aspects of) TRIPS… In that way we would be able to turn up certain things faster. For instance we expect that people must be able to E-file their tax returns for 2018…”
Statia added, “If TRIPS used to work you could have been doing all your applications online. So you could have applied for your compliance online… but in the absence of that, we will be exploring other things in its place.”
Additionally, Statia had updated the media on the ASYCUDA system stating that Cabinet has already given the approval for the funds. The new programme is slated for implementation within two months.
“So with that new system you will reduce collusion and under-invoicing and you would get a smooth system,” the Commissioner General told the media.

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