Latest update September 7th, 2024 12:59 AM
May 03, 2018 News
… “It is just too costly”, Junior Finance Minister
By Kiana Wilburg
Two years ago, the APNU+AFC Government announced that a forensic audit would be conducted on the Guyana Revenue Authority (GRA); an entity that is still grappling with wiping out systems and practices of corruption.
But Junior Finance Minister, Jaipaul Sharma, revealed yesterday that Government will no longer pursue this forensic audit. The politician said that the venture was found to be too costly, even though it was going to be completely funded by the Inter-American Development Bank (IDB).
Minister Sharma questioned on whether the audit was initiated, said, “No we never proceeded with it. It was too costly and the IDB didn’t have enough. I think they had an issue with the funding. The IDB was trying to source the funding… but when we looked at the amount of money that they had; what they were willing to offer (we realized that), it had to come out of money that was already approved for us.”
Sharma said he could not recall the amount that was already approved but, what was on the table was not enough. He insisted that no money was approved.
The Junior Finance Minister said that the government was also faced with a classic case of opportunity cost. He said that government had to decide if it was going to forego a development project that the money could be used for a forensic audit on GRA. He said that ministers elected to do the former.
The politician said, too, that he was “all for the GRA audit” but the money that was available from the IDB would have been enough to cover six months. He was hoping for more than that; perhaps a year.
IMF STEPS IN
While no forensic audit report would be pursued into GRA, its Commissioner General, Godfrey Statia, has taken several steps to learn the unbridled truth about the agency he was asked to take over more than 18 months ago.
In this regard, the Chartered Accountant had invited the team from the International Monetary Fund (IMF) to conduct an assessment of the major strengths and weaknesses of the revenue authority.
In its May 2017report, the IMF outlined GRA’s main strengths and weaknesses. The strengths included a highly qualified cadre of staff, extensive information available to taxpayers through a variety of channels, withholding and advance payment mechanism in place, independent graduated dispute resolution mechanism and strong external oversight mechanisms.
The weaknesses highlighted were that there were no-segment based management of taxpayers, functional limitations of the IT system, Limited e-transaction system, lack of strategic and structured risk management approach, weak filing and payment compliance, de-centralized audit case selection process, absence of legislative tax rulings system and compliance improvement programme limited in scope and content.
Within weeks of receiving this report, Statia reported that more than 80 percent of the issues identified were being addressed. He noted, however, that sweeping changes will not happen overnight. Statia said that it can take up to three years for GRA to smooth out the kinks in its systems.
Upon the receipt of the said report, the Commissioner-General said that a further request was made that another study be done to advise GRA on the next steps in modernizing the Authority.
Statia said that this assessment was done in September 2017, a draft submitted in October, and a final report done in December.
The major recommendations of that assessment for January 2018 include the production of monthly statements of total arrears and collectible arrears to inform debt management activities; refocus and strengthen risk management by having a risk management unit gather and analyze information; and set and monitor selectivity criteria; and ensure the GRA’s structure, capacity, capabilities, treatment, products and evaluation framework are focused initially for the large taxpayer segment.
Statia also noted that in 2007, PricewaterhouseCoopers (PWC) did a diagnostic study for the Authority. That study is sitting on the shelves, and was never implemented.
He said, “In 2017, upon a visit to Guyana, a PWC partner and a former colleague from the Trinidad and Tobago Internal Revenue, was on the team, and I was able to persuade her for PWC to do an update of the diagnostic study part with cost to GRA.”
Statia added, “This was completed in July 2017, and its findings were similar to those outlined in the IMF report. What stood out in their report, however, is the fact that GRA appears to be consistently under-budgeting revenue collection.
“GRA is aware that the tax base is larger than the tax collections, but under-budgeting masks the accountability of bringing the taxpayer base closer to reality by increasing taxpayer compliance or reducing tax avoidance or evasion.”
The Chartered Accountant also reminded that one of the leading causes of GRA’s problems or weaknesses is its poor IT system. For almost 10 years, the GRA failed to implement critical parts of an IT system.
The consequences of the entity’s actions in this regard only contributed to billions of dollars in revenue leaks and even rampant corruption.
Statia explained that the IT system — the Total Revenue Integrated Processing System (TRIPS)– is currently being upgraded.
Mineral and oil rich country borrowing to feed, clothe and house its citizens.
Sep 07, 2024
2024 Caribbean Premier League… GAW vs. SLK Kaieteur Sports – A fired up Guyana Amazon Warriors team will be looking to extend their mini unbeaten streak, as they will be gunning what could be...Kaieteur News – We have been advised by Guyana’s political elder that fifty years ago, the doctrine of defence in... more
By Sir Ronald Sanders Kaieteur News – There is an alarming surge in gun-related violence, particularly among younger... more
Freedom of speech is our core value at Kaieteur News. If the letter/e-mail you sent was not published, and you believe that its contents were not libellous, let us know, please contact us by phone or email.
Feel free to send us your comments and/or criticisms.
Contact: 624-6456; 225-8452; 225-8458; 225-8463; 225-8465; 225-8473 or 225-8491.
Or by Email: [email protected] / [email protected]