Commissioner Hema Khan of the Value Added Tax (VAT) and Excise Tax Department, in a press release yesterday, extended the VAT return deadline for January to Friday, waiving some penalties up to Friday but not all.
There was also a strong warning that there will be no extensions for VAT returns for February and an admonition also to businesses that should have registered for VAT but had not done so as yet.
February 21 was the deadline for the January returns and 1,674 of the 2,100 or 79.7% of the VAT registrants had filed their returns on time.
“In order to be as helpful as we can, we have extended the date for filing the January VAT returns until Friday, 9 March and we will waive penalties for those who have filed by then,” said Commissioner Khan in the release, adding that Section 85 (1) of the VAT Act allows for such provisions.
“However it must be clearly understood that the full amount of interest will still be payable since this cannot be waived.”
Under normal circumstances, the VAT legislation dictates that persons who are late in making their returns are liable to a penalty of $1,000 for each day that the return is not made, or 10% of the tax that is due for each month that the return is outstanding – whichever is the greater. In addition, interest is payable on the outstanding amount of tax at a rate of 2% simple interest per month, or part of a month.
Businesses under the VAT legislation must make a monthly return of the VAT they have incurred on their purchases and overhead costs and the VAT they have collected from their customers, paying the difference to the Guyana Revenue Authority. This must be done within 15 working days, following the end of the month.
“However, since this is the first time that businesses have been required to make a VAT return, it is possible that some businesses have had difficulty in understanding or meeting their legal obligations, in spite of the widespread publicity and assistance from the GRA,” according to Khan.
According to the release, the VAT Department has received several requests for extension of time, filing, (waiving) of penalties and interest for the first VAT return.
“I should stress that this is a ‘one-off’ concession. Returns and payments for the month of February are due to be made by Thursday, March 22. There will be no extension of this date.”
In addition, Khan noted that although they have waived penalties for those who have failed to file their January returns on time, they will be liable still to pay any interest that has accrued from the date they should have paid the tax due for the month of January.
It was also stressed that there will be no leniency for those who are legally required to register for VAT but have failed to do so.
These businesses were said to be working against the interest of Guyanese and damaging the economy.
“We have intelligence about these businesses. We are currently identifying them and will take action against them. It would be in their own interest to register now before we contact them,” she emphasized.
Businesses which should have registered and did not do so are liable for double the amount of tax they should have collected since the time they should have first registered, plus interest and late filing penalties, or they could face a fine of $25,000 and imprisonment for two years.
