The amount of money owing to the National Insurance Scheme (NIS) in employee contributions has now exceeded the $500M mark and a senior NIS official has told Stabroek Business that the Scheme is making “little headway’ in collecting the amounts due to it through the Magistrate’s Courts.
“It has now become obvious that we will have to adopt new strategies to deal with defaulters. I expect that this is one of the critical issues with which the Report of the (NIS) Reform Committee will deal,” the official told Stabroek Business.
Several months ago the NIS had told Stabroek Business that outstanding amounts owing to the Scheme by businessmen had reached $500M. Stabroek Business had also learnt that the Scheme was pursuing a number of cases in the courts including some against businesses who owed tens of millions of dollars in employee contributions. The source told Stabroek Business that while the courts had paid some attention to a few minor cases no progress had been made on the major ones. According to the source the recent preoccupation of the Magistrate’s Courts with traffic matters had meant that other cases had been pushed back.
Stabroek Business has learnt that in the face of slow court proceedings the NIS may now be prepared to examine other means of reaching settlements with defaulters including mediation and persuasion. The source also hinted that the NIS may be prepared to emulate the Guyana Revenue Authority by accepting property in lieu of payment.
Asked whether resort to the commercial court may not result in speedier judgments in what has now become “a mountain of cases” the official said that the NIS would only resort to the commercial court on a case-by-case basis and then, only at the request of the defendant. The source explained that while the conventional court allowed a maximum of six months to allow for judgments to be effected the commercial court allowed for a lengthier period. Additionally, while the NIS can prosecute its own cases in the conventional court it would be required to recruit an attorney-at-law for cases that are being heard in the commercial court.
COPS Security Service, which owes the NIS more than $90M, has indicated that it wishes the matter to be heard in the commercial court but, according to the source, is yet to make its request formal.
Another security firm, the United Associates Security & Domestic Service (UAS&DS) which according to the official had owed the Scheme around $40M has liquidated $2M of that debt. The NIS official told Stabroek Business, however, that the UAS&DS was now acknowledging indebtedness totalling only $10M. The NIS is prepared to make its case in court for the remaining amount.
Meanwhile the source told Stabroek Business that the default rate continues to climb as businesses continue to ignore the law governing the payment of employee NIS contributions. The official said that a point had long been reached where some businesses were simply refusing to take their obligation to the NIS seriously.
