Finance Minister, Winston Jordan has rejected claims by Opposition Leader, Bharrat Jagdeo that a tax deal between Guyana Revenue Authority (GRA) and Demerara Distillers Limited (DDL) has set a dangerous precedent for similar demands to be made by other companies.
“No! Settlements at GRA go on all the time… Listen, they (GRA) didn’t wake up overnight and decide to settle,” Jordan told a news conference ahead of his response to several questions on the issue by the Opposition in the National Assembly. He said government did not give up GYD$5 billion in exchange for GYD$1.5 billion.
Jagdeo is on record as saying that a GYD$1.5 billion Consumption and Excise Tax settlement with DDL could see other companies asking the GRA to be treated similarly, a move that could see the Treasury losing a total of GYD$60 billion. The Private Sector Commission (PSC), in welcoming the out-of-court settlement, has urged the GRA wish to “engage other aggrieved companies to apply similar formulae to correct the distortions in the market place resulting from this action.”
But the Finance Minister on Monday disagreed, saying that GRA has taken the “sound” decision to settle the matter because the GRA had lost all the case in the High Court and Court of Appeal over the past 14 years.
“Any attempt by other business persons to make claims and so on will be vigorously opposed based on principles that underline the settlement with DDL,” he said.
The GRA had originally levied GYD$5,392,020,753 in Consumption Tax in 2009. It was immediately challenged in the High Court by DDL.
In the end, the out-of-court settlement has seen the company agreeing to pay GYD$1.5 billion of which GYD$100 million have been already paid to the GRA.