Guyana Revenue Authority (GRA) Commissioner-General Khurshid Sattaur says that several banking institutions are delaying access to the mortgage interest relief scheme for first-time home builders and owners based on the number of applications that lack critical banking information.
The scheme, which was one of the measures announced in last year’s national budget, permits first-time home owners who are holders of mortgage loans of up to $30 million from a commercial bank or the building society to deduct the interest they pay on such mortgages from their taxable income for the purpose of personal income tax.
In a statement issued yesterday, Sattaur noted that implementation requires the assistance of the various lending institutions and said the GRA is “dissatisfied” with the level of cooperation it has received so far in the processing of information to facilitate the scheme.
He recalled that last October, the GRA held workshops with representatives from the various lending institutions, started a public education campaign and was vigorous in providing the information necessary for mortgagers to qualify for this relief.
“To date however, the biggest hurdle has been the receipt of applications without the accompanying bank information,” Sattaur said. “This has forced the Revenue Authority to accept applications which cannot be processed since the relevant Letter by Lender Form (Form 2) and Schedule of Interest per Year are missing. Without this key piece of information applications will not be finalized for approval,” he said in the statement.
To date, he revealed, the GRA has received 1,487 applications, of which 1,437 were received in 2013 and the remainder in the first two weeks of this new year.
Of the 470 applications submitted by customers of Republic Bank, 687 from the New Building Society, 96 from the Guyana Bank for Trade and Industry, 87 from Scotiabank, six from Demerara Bank, four from Hand-in-Hand Trust, 50 from Citizens Bank and two from the Bank of Guyana, more than 200 applications were received with outstanding bank information.
“This statistic is quite troubling and the Guyana Revenue Authority will be having talks with the relevant stakeholders in an effort to fully understand the reason for the lack of information being provided to those mortgagers who have expressed their desire to benefit from this relief,” Sattaur said.
Sattaur had told Stabroek News last December that the implementation of the relief measure was taking longer than anticipated since the banks are not working as fast as he believes is warranted. “We are not getting the cooperation from the commercial banks,” he had said. “We have done everything we need to do but we are now waiting on the banks to do their part.”
He had explained that some of the banks were complaining that it would take time to put the systems in place to facilitate the measures. He noted then, however, that some of those institutions have started to advertise the services.
The Government Information Agency (GINA) had reported that the introduction of the scheme would cost the government approximately $580 million annually, and will benefit tens of thousands of first time low and middle income home owners.
Sattaur’s statement yesterday noted that the GRA has established a unit catering specifically to the mortgage interest relief scheme. It is fully staffed and equipped to address the needs of persons accessing this service and will continue to process applications as submitted. For inquiries about the scheme the public is invited to contact the unit on telephone numbers 227-6060 or 227-8222 ext 1040 or alternatively, the Tax Advisory Services Section on ext 1200-1024.
To date, the banks have not issued a statement on this matter.
When he had signed the mortgage interest relief regulations on October 8th last year, Finance Minister Dr Ashni Singh had called on the GRA and the participating financial institutions to proceed to implement the regulations as soon as possible to ensure that the intended relief is delivered to the beneficiary population. The Minister stated that the relief is expected to make home ownership even more affordable and attractive and increase disposable incomes in thousands of households. He said it will also constitute a significant injection of cash into the economy for both savings and consumption, thereby generating and multiplying business activity.