GRA’s imposition of 30% excise tax on re-migrant illegal - Court rules

GRA’s imposition of 30% excise tax on re-migrant illegal – Court rules

Jul 30, 2024 Court Stories, Features / Columnists, News

– urged to refund those who were overtaxed

Kaieteur News – Chief Justice (Ag) Roxane George-Wiltshire on Monday granted an order declaring that the Guyana Revenue Authority (GRA)’s imposition of excise tax at the rate of 30% was illegal.

Chief Justice (Ag) Roxane George-Wiltshire

Since July 2023, the GRA raised the taxes payable by re-migrants from 10% to 30% on vehicles with engines larger than 3,000cc. On 8^th April, 2024, the Commissioner General of the GRA, Godfrey Statia, wrote Aditya Basdeo that he was given duty free concessions as a remigrant. However, Mr. Statia required that Basdeo pay 30% excise tax on his new generation 2023 Toyota Landcruiser vehicle. Mr. Basdeo took issue with this and caused his attorney to write the GRA on 15^th April, 2024 explaining that there was a problem because the correct and proper excise tax rate was 10%. In Basdeo’s case, the 10% was equivalent to over $1,500,000 but the GRA was insisting that he pays nearly $4,600,000 – a difference of $3,100,000 in taxes.

The GRA never responded and on 28^th May, 2024 Basdeo caused his attorney, Siand Dhurjon, to sue the GRA. Last week, the GRA’s Deputy Commissioner, Mr. Gavin Low, responded by saying that regulations of 10^th July, 2023 tripled the rate of excise taxes payable from 10% to 30%. For the last year, the GRA was tripling the excise taxes payable by remigrants for vehicles with an engine size of 3,000cc and above and doubling the excise taxes (at the rate of 20%) for vehicles with engine sizes above 1,999cc and under 3,000cc.

However, when the matter came up for hearing before the Chief Justice George on Monday morning, counsel for the GRA, Ms. Nicklin Belgrave, reported that the GRA made a mistake because they realised that the Minister of Finance had merely signed the regulations of July 2023 but the regulations were not duly brought into force by being published in the Official Gazette or being tabled in the National Assembly.

In other words, the GRA had been wrongfully and illegally charging 30% taxes to re-migrants and collecting those taxes without any authority. The Chief Justice granted all of the orders paid for by Mr. Basdeo through his attorney, Mr. Dhurjon. She declared that the GRA’s policy of requiring 30% excise taxes was unlawful and she granted an order of certiorari quashing Mr. Statia’s assessment of 30% excise taxes. The Judge also granted an order of mandamus to compel the GRA to apply the correct excise tax of 10%. The Judge granted an order that Basdeo’s 2023 Landcruiser must be released to him forthwith upon payment of the correct excise taxes.

Basdeo’s Landcruiser had come into Guyana on 28^th June, 2024 and has been on the wharf racking up storage costs ever since. The Chief Justice ordered that the GRA was to pay the storage costs as well as the costs of the lawsuit in a specified sum to Mr. Basdeo.

The new generation 2023 Toyota Landcruiser

When presented with evidence that the GRA was charging some people 10% and others 30% during the same period, the GRA claimed that those paying 10% had applied for their exemption ‘before the regulation was passed’. The Chief Justice remarked to the agreement of both counsel that the GRA should reach out to everyone who overpaid excise taxes and explain that the GRA made an error and refund the wrongfully collected monies to the taxpayers.

In an invited comment Mr. Dhurjon stated that “the Excise Act and its regulations do not permit the GRA to charge beyond 10% in excise taxes. For the last year, the GRA has been overcharging remigrant taxpayers illegal excise taxes to the tune of hundreds of millions of dollars cumulatively. It is unfortunate that in oil-producing Guyana, taxpayers have been wrongfully subjected to this. But this verdict opens the door for all remigrants who paid above 10% in excise taxes to seek a refund.”

Under the remigrant tax scheme, Guyanese who lived abroad for 5 years can be given duty free concessions allowing them to import their personal effects and their vehicles by only paying the applicable excise taxes. When a remigrant imports a vehicle and they are given the concession by the GRA, they do not have to pay customs duties and value-added taxes on the vehicle being imported. This removes many millions of dollars from the purchase of the vehicle. If the full taxes – all of the customs, VAT and excise taxes – were paid on a Landcruiser like the one concerned in the proceedings, a normal taxpayer would have to pay around $90,000,000 in total taxes depending on the value of the vehicle.

Basdeo is a young entrepreneur who lives on the East Coast of Demerara. He remigrated from the United States of America to start a new life in Guyana. He did not wish to comment to the media when contacted.