The authorities need to do much more about corruption as the entire country is at risk of being marginalised by the international economic community for failure to uphold its own laws, Sunday Stabroek business columnist Rawle Lucas says.
“The slow pace of moving to tackle the scourge of corruption leaves every person and institution exposed to mistreatment because the consequence of money laundering is not a one-way thing. The charges of corruption increase the risk for providers and customers. As a consequence, Guyanese must be prepared to give up some of their privacy in order to convince others that they earn or acquire their money legitimately. Anything less will see Guyana being swallowed by the economic black hole,” Lucas warned.
Writing in his column about surmounting the challenge of money laundering, Lucas, who is also the Chairman of the Board of the Guyana Revenue Authority (GRA) said that Guyana has been plagued with charges of corruption and has been accused of doing very little to change or reduce those allegations.
While there is no empirical data to support the contention definitively, three crimes in particular are closely aligned to cross-border movement of money. In the case of Guyana, drug trafficking, smuggling and bribery appear to dominate criminal activity with consequences for money laundering and the fighting of terrorism by Guyana, Lucas wrote.
“Politicians and other public officials need to stop monkeying around on these issues and understand that the entire country is at risk of being marginalised by the international economic community for failure to uphold its own laws. Private businesses that engage in smuggling and illicit trade practices expect the banks to accept their money without question. That should not happen if some investors insist that smuggling, tax evasion and paying kickbacks must be part of their business model. The people in the private sector just like those in the public sector need to understand that smuggling, drug trafficking and bribery are destroying this country. For as long as these illegitimate business activities are allowed to take place unhindered, the international economic pressure on this country will mount,” he asserted.
Lucas pointed out that the US has been citing Guyana as a transit country for illicit drugs coming from other parts of Latin America and the Caribbean. The reports also indicate that those involved in the illicit trade in drugs seem to have substantial influence over the criminal justice system in Guyana. “These are troubling disclosures which make it even more necessary for the financial institutions in Guyana to know their customers very well. The success of the drug trade is not possible without the support of public officials,” Lucas declared.
He said a research paper done by one of his students observed that smuggling has always been a problem for Guyana. Smuggling is any activity to import or export goods by evading customs control and the attempt to evade taxes on imported goods. “Many individuals and businesses engage in smuggling in an effort to evade paying duties and taxes on goods brought into the country. It is estimated that successful smuggling leads to annual revenue loss of about G$30 billion,” Lucas said.
He noted that the estimate combines import duties, value-added taxes (VAT) and income taxes. He pointed out that smugglers use various entry points to bring “un-customed” goods into the country including at border entry points with weak or no regulatory controls such as Charity and Morawhanna.
“But even in areas with a customs presence, smugglers take their chances too. They do this by offering bribes to Customs and other officials. No one is certain how much revenue is lost through bribery, but the act is of major concern to the authorities,” Lucas said.
He noted that persons employed to collect and regulate the collection of income for the state are officials who take an oath and promise to execute their duties in the interest of the county. “Yet, they are willing to turn their backs on their fiduciary responsibilities and abandon the spirit and the letter of the law that they are asked to uphold. These supposedly trusted individuals hired to protect the revenues of the state often times side with smugglers and end up injuring the revenues of the country,” he said.
According to the columnist, the low level of collection of customs duties and excise taxes by the tax body thus tells its own story of why corruption is successful in Guyana.
He highlighted the case of gold smuggling where it has been estimated by the government that 15 000 ounces of gold is smuggled every week. “Naturally therefore, when foreign financial institutions hear that 15,000 ounces of gold leave Guyana illegally every week, they lose confidence in the people, the institutions and the government that should be preventing this event from happening. It is a collaboration that involves the public and the private sector. Those private businesses that think that they are doing a good thing by engaging in smuggling are actually bringing greater harm to the entire country. Confronting smuggling and discouraging bribery is everybody’s business,” Lucas declared.
He said that doing so together makes meeting the international Financial Action Task Force-compliance standards much easier and the cost of doing business in Guyana cheaper.
