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NEW RULES: Pay your taxes first before you’re granted licenses, exemptions- Finance Minister

Opposition Leader, Bharrat Jagdeo was Friday afternoon riled by government’s announcement that Guyanese would first have to prove that they are paying their taxes before they are granted licences and tax exemptions.

“This is a big brother kind of approach. The GRA (Guyana Revenue Authority) will now have a primary part in our lives once again. It is an old Burnhamite approach to controlling people and controlling their access to services and growth in income,” he said in clear reference to the 1980s under the then People’s National Congress (PNC) administration of late Forbes Burnham when Guyanese had required tax clearance certificates before they had been allowed to travel overseas.

Delivering the 2016 National Budget, Finance Minister Winston Jordan announced that the Tax Act would be amended to ensure that before all licences are issued for forms of trade and business, the applicant has complied with his/her obligations to file annual returns and paid, or has made arrangements to pay, all taxes due and payable.
Further, Jordan said the Customs Act would be amended to prevent the granting of exemptions unless applicants fill all outstanding Income Tax returns and that “all taxes have been paid or satisfactory arrangements have been made to pay such taxes.”

But Jagdeo, a former Finance Minister, said the return of tax compliance would be “very, very hard” for people living in rural and hinterland areas who would likely have to travel to the GRA headquarters to receive clearance. He said such a move would also result in a further loss of private sector in Guyana’s economy. “It is a lazy way of going after tax evaders- to pass the burden on to everyone, including poor people,” he said.

Tax revenue is projected to increase by $7.6 billion, or 5.3 percent, while non-tax revenue is estimated to grow by $4 billion, or 21.7 percent.Value added and income taxes are projected to grow by 9.9 percent and 5.3 percent, respectively.

Latest figures announced by the Finance Minister shows that tax revenue amounted to GYD$142.9 billion, an increase of 5.2 percent, which was driven primarily by increased collections of personal income taxes (11.1 percent), company income taxes (4.7 percent) and property taxes (33.6 percent). “Low compliance by self employed individuals continued to be the main factor why this category lags behind other areas of income tax collection,” said Jordan.

The Budget statement says in 2015 excise tax collections improved to GYD$33.3 billion, an 18.1 percent increase. Similarly, international and trade transactions increased by$170 million, to reach $14 billion. Value Added Tax collections of GYD$35.4 billion, representing a 5.2 percent decline. He said one reason for this was the increase in the number of zero-rated items.