‘Extremely worrying’ laws passed for GRA to garnish VAT from taxpayers’ bank accounts, block travel

Last Updated on Friday, 6 January 2017, 8:59 by Derwayne Wills

The Guyana Revenue Authority (GRA) will now have the power to garnish VAT owed to the state directly from taxpayers’ bank accounts without the approval of the court, a move which Opposition MP Priya Manickchand called “extremely worrying” as the proposed amendment was presented in the National Assembly today by Finance Minister Winston Jordan.

Manickchand said the amendment to Section 51 of the Value Added Tax Act, which always allowed for garnishing of personal bank accounts but with the approval of the court, “epitomises what we have seen in the country.” “No office,” Manickchand said, “should be vested with the type of power that is going to be given here in Section 51.”

The proposed Section 51 amendment reads: “where judgement is granted against a taxpayer, in favour of the Revenue Authority and the taxpayer is a customer with a bank, trust company, credit union or other financial institution, the Commissioner shall by demand or notice, require the bank, trust company, credit union or other financial institution to remit the amount payable to the Revenue Authority as a debt owed to the State.”

Minister Jordan defended the proposal saying since 1962, the Income tax Act had provided for garnishment. “It was decided this was essential to ensure persons who owe taxes and whom entreaties were made were going to see the ‘big stick’ method used.”

The body can now also recommend immigration authorities block travel of Guyanese owing in taxes.  Turning attention to another amendment, Section 45, of the VAT Act, Manickchand said the “amendment seeks to remove the proviso… now the Commissioner, with help of staff, decides a person owes taxes and without a court order says to the Chief Immigration Officer that the person cannot travel.”

“We should never, in this House, pass laws that are so draconian,” Manickchand continued, “we should afford citizens a hearing before constitutional rights granted to them in our constitution can be infringed.” Manickchand urged for government to pass the Bill by taking out amendments to section 45 and 51.

Further amendments to the VAT Act replaced a $25,000 fine with either $200,000 or 5% of the tax assessed, whichever is greater, against persons or companies that “knowingly or recklessly fails to present books and records when requested by the Commissioner.” Further, in the case of non-resident companies that fine shall be $1million.

Opposition MP Anil Nandlall took to the floor challenging GRA’s proposed power to bar persons from travelling citing Articles 148 and 8 of the Constitution.

Article 148 provides for freedom of movement, while Article 8 establishes the constitution as the supreme law of Guyana and if there is any law made that is not in keeping with provisions of the constitution, then that law shall be null and void.

Nandlall read out a series of cases in Guyana’s history, during the 1980s, where Guyanese, mostly political leaders, were barred from leaving the country by immigration, but where the court ruled they were allowed to move. Among those named were current Education Minister Dr Rupert Roopnaraine, and Eusi Kwayana.

“No civilised legal system will countenance the concentration of such power in a single body without exercise of judicial procedure,” Nandlall said passionately as he asserted “taxes must be collected lawfully [and] due process must be embarked upon and observed.”

Closing off the exchanges, Minister Jordan said the law seeks to go after “crooks who owe taxes.” He questioned why VAT collected on behalf of the government must become a political issue when, according to the Minister, businessmen are using taxes for cash flow.

“Many people who paid NIS and PAYE are finding themselves in trouble when they turn up and NIS and PAYE have not been paid,” Jordan said.

“It is a travesty in this House for people to defend tax dodgers and tax cheats when we are trying to strengthen the hand of the (GRA) Commissioner to collect taxes on behalf of the government,” Jordan said, cautioning, “we cannot, as a House, be seen to be leaning on the side of tax dodgers.”