The Guyana Revenue Authority (GRA) will be cracking down on self-employed tax evaders, who according to Commissioner-General Khurshid Sattaur pay less than 25% of the required taxes.
These “hard-to-tax individuals,” Sattaur told a news conference yesterday, currently represent $4 billion in taxes collected annually and included some of the wealthiest persons in Guyana, including many private doctors, dentists, business owners and contractors. This is not the first time that the GRA has pledged to go after these individuals. Sattaur noted that many prominent people evade paying taxes and that the GRA Audit and Verifications Department would be specifically targeting those individuals in 2014.
In some instances, he said, the taxes paid by the self-employed could be less than those paid by a clerk at the GRA. However, he revealed that through the recognition of people’s affluent lifestyles, the GRA suspects that many persons are extremely delinquent in paying their taxes. He said that the GRA had a hard time gathering information, making investigations and prosecutions difficult.
Sattaur did, however, say that since the establishment of the audit and verification department, the GRA has made significant strides in cracking down on the self-employed category, who are responsible for paying taxes on a quarterly basis in March, June, September and December.
He noted that for 2014, the GRA was responsible for the collection of over $135.5 billion in taxes and that the goal this year was to increase the number of income tax filings and amounts collected from the “hard-to-tax” bracket, especially cambios across the country.
Sattaur said that it was public’s responsibility to ensure that they collected receipts as proof of purchase of a service or product. He explained that many in the “hard-to-tax” bracket have an easier time essentially cheating the system because consumers don’t demand a receipt. He said that without the receipt being issued, the business or person providing the service does not have to identify the claim and are fraudulent.
Sattaur said that when consumers cut deals with businesses, what they are essentially doing is starving the GRA from collecting revenue and in essence starving the country of resources. He noted that the GRA was far more aggressive in its investigations of “tax cheats,” but he said that employees have to ensure they are well versed in understanding how their taxes are collected through their employer. He also stated that it was not the case that the GRA was not doing its job and noted that the agency has increased the amount of taxes collected throughout the years.
Sattaur also said that the GRA will continue to pursue the delinquencies by COPS Guyana Ltd, Didco Trading Co., and Friendship Hotel and Restaurant Holdings Inc.
The head of the GRA stated that these negligent companies continue to evade the GRA and that they owe millions in back taxes. In October 2013 the GRA released a list of delinquent companies owing over $1 billion.
Meanwhile, Sattaur said it was expected that only 60,000 income tax returns would be submitted this year. He acknowledged that this was not reflective of the actual employment rate in Guyana and said that 2% and 5% penalties would be applied for persons who failed to submit by today. In 2013, over 50,000 returns were filed with approximately 11,000 coming from the mobile tax sites across Guyana. This year, Sattaur noted, over 13,000 returns were filed at the mobile tax sites.
He also stated that unfortunately the online payment for taxes was not very successful, with only two people utilising the service including Sattaur himself. He said that this was disappointing, but that he hoped by next year the GRA has ScotiaBank and GBTI as well as Republic Bank and Demerara Bank as providers of the service. He said that the Bank of Baroda and Citizens Bank have showed no interest in providing the online service. Sattaur noted that he expected the online service to kick off in the next few years and noted that its negligible use was reflective of a false response to what consumers had demanded.