Large Taxpayers Unit adds $4B to Govt.’s coffers – Jordan

Dec 31, 2018 News

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By Kiana Wilburg

The Large Taxpayers Unit (LTU), which was set up by the Guyana Revenue Authority (GRA) last year is proving to be a valuable initiative as it brought in $4B in tax revenues for the government’s coffers this year.
This was recently revealed by Finance Minister, Winston Jordan.
For 2019, the economist said that an Oil and Gas Unit will be established within the LTU, dedicated to ensuring that the appropriate revenues are paid to the state by petroleum-producers, in keeping with their respective production sharing agreements.
Already, the Government has secured the support of international institutions to undertake capacity-building initiatives in the GRA and other institutions, providing expert advice in several areas, including cost-oil audit and production sharing agreements.

Speaking to other GRA systems, Jordan said, “This year, we commenced the pilot of the Automated System for Customs Data (ASYCUDA), which facilitates paperless and improved customs transactions. Based on testing to date, we anticipate that we will move towards full implementation, in 2019.”
“With regard to inland revenue management, we are exploring moving away from the current platform – Total Revenue Integrated Processing System (TRIPS) – to new software. This is expected to have a dramatic impact on the time it takes to execute routine tasks; it will also improve management controls and enhance the quality of data to enable effective management and strategic decision-making.”
While the government continues to improve internal systems at GRA, Jordan said that there will also be moves to expand tax services across the Regions, with specific focus on the hinterland regions. This year, Jordan noted that the GRA office in Lethem was connected to the Head Office. This allows for live and on-location processing of business-related licenses, among other services, thereby reducing cost and waiting time for taxpayers in Region Nine.
In addition, Jordan said that GRA expects that the new office in Mabaruma will become operational at the beginning of 2019.
He said that overall, the aforementioned efforts have resulted in an increase in the number of registered taxpayers from just over 79,000 at the end of 2017, to about 83,000 to date.
Further to this, the Minister reminded that GRA had introduced e-services to taxpayers in 2018, thus allowing individuals to file their tax returns via the internet, and eliminating the need to go into the nearest GRA branch or join a queue. In 2019, Jordan said that the Government intends to make e-filing mandatory for certain categories of taxpayers, with the intent of improving the efficiency of collection.
TACKLING OTHER WEAKNESSES
Earlier this year, the International Monetary Fund (IMF) had identified a number of weaknesses, which exist within the tax systems of the Guyana Revenue Authority. But the entity’s Commissioner General, Godfrey Statia was pleased to report that more than 80 percent of those issues are being tackled. 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.
Statia noted that it was GRA that invited the IMF to visit the authority and conduct an assessment of its systems. Statia said he told the team that GRA is not interested in sugarcoated words. He wanted the IMF team to be as outspoken as they could about the challenges facing the revenue authority.
In its report of May 2017, 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: 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.
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 Commissioner General said, “Suffice to say that many of the recommendations made by the team were either already work-in-progress, or envisaged to be implemented during 2018 and beyond. The major recommendations of that assessment for January 2018 include Produce 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. Also, ensure the GRA’s structure, capacity, capabilities, treatment, products and evaluation framework are focused initially for the large taxpayer segment.”
He continued, “In 2007, PricewaterhouseCoopers (PWC) also did a diagnostic study for the Authority which was sitting on the shelves, and never implemented. In 2017, upon a visit to Guyana, a PWC partner and a former colleague from the Trinidad 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.
TRIPS
For almost 10 years, the Guyana Revenue Authority failed to implement critical parts of an IT system. The consequences of the entity’s actions in this regard only contributed to billions in revenue leakages and even rampant corruption.
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 CUSTOMS 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.
Statia added, “What I did now is instead of them using an entire TRIPS system, I said, ‘No. concentrate on the internal revenue modules, and we are going to go to the Automated System for Customs Data (ASYCUDA). That is what we are doing.”
The GRA Commissioner General said that the ASYCUDA system will cost close to US$3M.

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