GRA no longer holding back on application of Property Tax-Statia

GRA no longer holding back on application of Property Tax—Statia

Apr 07, 2018 News

GRA Commissioner General, Godfrey Statia

By Kiana Wilburg
There is a huge misconception when it comes to Property Tax. Many believe that it refers to a tax on a building.
But according to Commissioner General of the Guyana Revenue Authority (GRA), Godfrey S. Statia, Property Tax refers to one’s net worth which is calculated as the sum of your assets minus your liabilities.
The tax chief said, “So if a man has a lot of liabilities, even though he has a lot of assets, he could end up paying little or no Property Tax. A man has 10 buildings valued at $1B but he owes the bank $900M because he borrowed money to build those structures.”
Statia continued, “He would only pay Property Tax on the $100M because this is a net worth tax. With rates and taxes, however, you pay on the building; they (City Hall) don’t care about your liabilities. And I find that people often mix up the two taxes and how they work.”
The Commissioner General added, “Also, we need to understand that Property Tax and Income Tax are interlinked. Once a man declares his rightful property, you can now see how his wealth has grown over the years. He would have to explain how he got the wealth if it cannot be reconciled with his income.”
The Chartered Accountant said that to some extent, there are proper records where this is concerned at GRA.
He noted that many individuals have not been filing complete statements and GRA has in the past, been remise in its job to request all the necessary documents needed to calculate Property Tax.
“What has been happening is that persons so as to beat the tax were only filing part return, that is, their income statement. But they are supposed to provide a balance sheet. If they don’t, you now have to demand that balance sheet and in doing so, it would show your assets and liabilities. You would then be able to calculate the Property Tax”.
Prior to 2015, Statia said that the application of Property Tax was done at a minimized level. He assured however, that GRA is no longer holding back where this is concerned. He said that the entire system was flawed in the past but it is now being straightened out.
The Commissioner General said, “In the past, the occurrence of Property Tax being calculated was minimized. No one was checking up on the balance sheets, as they should. A true and correct return means that it must be complete.”
He added, “If you are self employed you have to submit your income statement and your balance sheet, if you are a normal employee , you have to submit your income tax return and if your assets are beyond a certain amount , then you are required to pay the Property Tax. But unfortunately, GRA has not been checking on that in the way they should have.”
The need for the proper application of Property Tax was also referenced by the Tax Reform Commission, which was assembled by the Granger Administration.
The Commission’s 2016 report also noted that the total revenue from Property Tax over the past nine years only amounted to $14.4 billion at an average of $1.6 billion per year. According to Statia, the proper management of the tax could have led to much more being collected by GRA.

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