Govt. gazettes order to increase excise tax on vehicles for re-migrants

Aug 06, 2024 News

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Kaieteur News – The Government has published in the Official Gazette an order that outlines the increase in excise tax for re-migrants. The order outlining the amended excise tax regulations was published in the gazette on July 30, 2024, less than 48 hours after Chief Justice, Roxane George-Wiltshire handed down a ruling declaring the 30 percent imposition in excise tax for re-migrants was illegal.

The order signed by Senior Minister in the office of the President with the Responsibility for Finance and the Public Service, Dr. Ashni Singh outlines the Excise Tax (Amendment) Regulations 2024 shall be deemed to come into operation on September 1, 2023.

Under the amended regulation re-migrants, settlers, and returning students are required to pay five percent excise tax on vehicles which has a Cubic Capacity (cc) of less than 1500cc, vehicles those with between 1500cc-1800cc are also required to pay five percent tax, those with 1801-2000cc are required to pay 10 percent tax, those with vehicles that have 2001-3000 cc are required to pay 20 percent and those with above 3000 cc are now required to pay 30 percent on taxes.

Last Monday, Chief Justice (Ag) Roxane George-Wiltshire granted an order declaring that the Guyana Revenue Authority (GRA)’s imposition of excise tax at the rate of 30% was illegal. 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 8th April, 2024, the Commissioner General of the GRA, Godfrey Statia, wrote Aditya Basdeo that he was given duty free concessions as a re-migrant. 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 15th 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.

When the matter came up for hearing before Chief Justice George Wiltshire, 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. Siand 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 came into Guyana on 28th 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. 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 re-migrant 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 re-migrants who paid above 10% in [within that period] excise taxes to seek a refund.”

Under the re-migrant 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 re-migrant 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.

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• Dr. Ashni Singh, excise tax, gazettes, re-migrants, Senior Minister in the Office of the President with Responsibility for Finance

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