Lawyers, doctors and other professionals collectively pay less than $6M to GRA in 2017

Oct 28, 2018 News

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The hundreds of lawyers, doctors and other professionals with private practices across Guyana have collectively contributed only $5.6M to the Guyana Revenue Authority (GRA) in 2017.  This $5.6M, the Audit Office of Guyana noted, is even less than what was collected the year before.

The Auditor General latest report highlighted that the conservatory order which the court placed in 2003 barring GRA from instituting higher professional fees, has indeed hampered revenue collection in this area.

But further to this, the Auditor General noted that there were still measures that the GRA could have taken, which would have allowed it to collect at least a few million dollars more.

The Audit Office said that the GRA continued to experience difficulties in having practising professionals comply with Section 37, Chapter 81:01 of the Income Tax Act. That section of the act speaks to the payment of professional fees. Professionals in this context, speak to white collar workers who have their own practices. This would include lawyers, doctors, pharmacists and chartered accountants.

The Auditor Office reported that the total revenue collected from Professional Fees for the period January to December 2017 “amounted to $5.6M or 0.01 percent of the total revenue collected by Internal Revenue…When compared to 2016 collections, this tax type is 6% below the collections during the same period.”

To this finding, the GRA responded by pointing to the conservatory order still in place since 2003. GRA said that because of this, “a number of professionals failed to take out their Tax Practice Certificates and pay the rates required, thus revenue for professional fee would be negatively affected.”

The Audit Office also noted, “As at 31 December 2017, there were 605 active registered professionals in the TRIPS database of which only 260 professionals or 43 percent purchased Professional Certificates.

As a result, 345 or 57 percent of the active professionals had not purchased Professional Certificates. Despite the constant decline in professionals complying with Section 37 of the Tax Act, the Authority failed to conduct any field visits during the year.”

In response to that finding, the GRA admitted that field visits were not conducted during 2017. But, the authority said that for 2018, calls are being made to persons listed in the system as professional to enquire whether they are working, where they are working and to advise them of their need to take out Tax Practice Certificates once required. It was observed that more persons took out their Tax Practice Certificates for this year when compared to the same period last year, thus showing our action was successful.

LATE PAYMENTS

In addition to those who have not been paying, the Audit Office found that many of those who paid, paid late.

The report stated, “In accordance with Section 37 of the Chapter 81:01, professionals practising for a reward in any year are required to be the holder of a Practice Certificate issued by the Commissioner- General in respect of that year.

“The fee for the certificate is payable on or before the last day of February each year. At the time of reporting, eighty-six professionals paid for certificates after the stipulate date. Similarly, in 2016, two hundred and one professionals paid for certificates after the stipulate date.”

The GRA did not deny this; however, the Authority indicated that at mid August this year, 187 professionals were issued with Tax Practice Certificates as compared with 176 for the same period in 2017.

FAILED EFFORTS

Even further, the Audit Office noted that it failed in its efforts to review certificates.  The report said that a sample of 30 professional certificate applications was requested for audit review. However, “at the time of audit, these applications remain unpresented. As a result, the number of registered professionals in practice that had not purchased certificates and whether certificates were issued only to professionals who met the requirements could not have been ascertained.

“At the time of reporting in 2018, efforts are being made to have the files presented for audit review.”

GRA acknowledged the comments of the Auditor General. The Authority said that presently files are being retrieved and will be presented for audit review.

In 2003, changes were made to the fiscal Amendment and Accountability Act and the fees for the various categories of professionals had increased.

For Category A, rates increased to $250,000; Category B, $150,000 and Category C, $75,000. Statia said that there were certain professions that were not a part of the 2003 Conservatory Order by virtue of not being able to afford the new costs, such as pharmacists.

In countries like Trinidad and Tobago, lawyers who fail to pay their professional fees are barred from representing clients in the courts.

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