Latest update November 23rd, 2024 1:00 AM
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Hundreds of Millions recovered from businesses caught fiddling with tax rates
– Revenue Authority to recoup losses going back to 2009
The Guyana Revenue Authority (GRA) has recovered hundreds of millions in taxes after uncovering a racket with business owners who were listing their enterprises as non-commercial, knowing this to be completely inaccurate.
GRA Commissioner General, Godfrey Statia
GRA’s Commissioner General, Godfrey Statia noted that the matter is one which has been going on for some time. According to Guyana’s laws, a company is considered commercial if at least seventy-five per cent of the gross income is derived from trading in goods not manufactured by it. Guyana Stores Ltd. is an example of a commercial entity.
Noncommercial companies would include those companies in which a large part of their profits is made from products it manufactures. Banks DIH would be considered a noncommercial entity.
The profits of commercial entities are taxed at 40 percent while those of noncommercial entities are taxed at 27.5 percent.
GRA’s Commissioner General said, “As you might be aware, the arrears at half-year increased to $6.3B. This is due to several reasons, one of which includes the fact that we were able to stymie a number of irregular practices. For example, we found that companies were playing around with the commercial and noncommercial rates. We picked it up and we have gone back to 2009 to start to recoup those losses.
“Persons have been doing it in collusion with accountants. Because the accountants know full well what is deemed to be a commercial company and what is not. And the GRA was negligent in not reviewing or examining those returns. I have been speaking to accountants more than once, you can’t prove that they (accountants) aided and abetted but we should have picked it up the minute they sent in their returns that this is a commercial company masquerading as a non-commercial company.”
Statia added that in some cases, it was clear that even some personnel at the revenue authority were not acquainted with the tax laws.
“But even then, there should have been a review process and it was virtually nonexistent until I arrived, that is why you are seeing an increase in some taxes…”
The Commissioner General said that the move by GRA to correct the anomalies in this regard has sparked a spate of objections from businesses. He emphasised however that he intends to do what is needed until the system is straightened out. (KIANA WILBURG)
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