GRA unveils aggressive plan to tackle tax dodgers…32,000 businesses active but not registered
As the debate on taxes and collections continues, the Guyana Revenue Authority (GRA) has announced a rash of measures to improve tax collections next year.
The idea is to collect billions of dollars from smugglers and other tax dodgers, including businesses, say Commissioner General, Godfrey Statia.
Speaking yesterday at a press conference at GRA’s Camp Street headquarters Statia said that since taking up the post in July on a two-year contract, he and his team have been meeting with stakeholders, and with departmental heads now authorized to speak on their respective responsibilities.
There have been a number of changes in the critical areas, including Customs, based on meetings with businesses and assessments of GRA’s branches. The idea is to reduce congestion at the head office. The regional branches are now equipped to handle simpler transactions.
Statia admitted that the GRA computer system, Total Revenue Integrated Processing System (TRIPS), has been experiencing problems. There are plans in place to stop it from “tripping”.
By end of April, the authority is hoping to make changes to TRIPS to what is known as ASYCUDA (Automated System for Customs Data), a special Customs programme that is in use in over 90 countries.
It will not only reduce downtime in processing at wharves but allow for better information sharing with the entity.
Statia explained that GRA has been paying close attention to smuggling which siphons off billions of dollars annually in revenues.
For example, there is a huge smuggling racket involving alcohol and cigarettes. Guyana loses an estimated $2B annually in taxes, he said.
GRA is working with Canadian Bank Note, which specializes in security measures to implement a stamp system that will allow enforcement officials to make inspections and determine right away whether taxes have been paid. The stamps will be affixed to the products imported into the country at the time of clearance.
The Commissioner-General said that fuel smuggling is also engaging the authority’s attention.
Recent checks were made by a GRA team at Eteringbang, Region Seven which borders with Venezuela. The cheap fuel there is being capitalized on by smugglers who fail to pay up to $20M in taxes weekly in that area alone.
The same situation seems to prevail at Morawhanna, which is a popular area of sourcing illegal fuel for gold mining.
Statia announced plans to deploy GRA officials to the area to collect the taxes. The idea is to establish a presence there to minimize smuggling and widen the tax base and reduce the burden on a few who do pay.
According to the official, the problems of collecting a fair share of payments of taxes could also be blamed on businesses colluding with some of GRA “unscrupulous” officers.
Statia sounded a clear warning of tough actions to reduce the corruption.
Tax evasion, he complained, is estimated at between 30-40 percent.
It appears that GRA will be paying less attention next year on the current taxpayers.
“We have to reduce our emphasis on people that we see…people that are in plain sight, people… that are the employees…versus the businesses that accumulate wealth that pay little or no taxes.”
Next year, to tackle the tax dodgers, GRA is planning to establish a Large Taxpayers Unit that will focus on compliance, enforcement, review and other things.
With 80 percent of the taxes coming from 20 percent of the businesses, the possibilities of collections takes even more significance, the official said.
“We could dedicate the rest of the team on what has fallen through,” Statia disclosed.
Another major problem affecting GRA is the fact that the current TRIPS system is not efficient with information sharing between key departments not happening as it should.
Also at the press conference yesterday were GRA’s Deputy Commissioner-General, Hema Khan and Lancelot Wills, Deputy Commissioner of Customs Excise and Trade Operations.
Statia also note that GRA has found evidence of many businesses are without licences although they are operating.
Many of them claim to be out of business or have offices elsewhere. The current TRIPS systems make it difficult to deal with these and GRA has to manually handle the incidents.
Businesses Not registered
The Commissioner-General said that close to 32,000 businesses are “non-registered” but are active.
It is the plan to issue provisional registrations to these with a mandatory deadline for the businesses to get themselves in order.
Another measure that GRA has taken on to reduce Customs delays, is the establishment of a post-clearance unit to have audits done after the goods are released from the wharves.
A number of businesses who seems to be in collusion with Customs officers are objecting to this process, Statia revealed.
The official made it clear that GRA is focus on its mandate- the collection of taxes in a fair manner. He noted that tax collection is a social contract with GRA the entity to implement the contract.
The official also appealed for taxpayers to raise concerns whenever issues occur. GRA is open to listening, he stressed.