NIS inspection visits create considerable unease among some business houses. Such visits can lead to the disclosure of irregularities in the management of NIS registers and the unearthing of evidence of evasion of employee remittances. The practice is widespread, and fraudulent. It is also one of the more disturbing examples of worker exploitation in Guyana. Evasion of NIS remittances also robs the state of resources for investment. Accordingly, where employer NIS registers cannot withstand official scrutiny, visits by officers can be discomfiting.
Neither the government nor any business or worker organization has ever addressed this problem with anything resembling sustained commitment. Indeed, it is doubtful that a single day goes by without someone having to face claim-related problems associated with employer non-remittance of contributions. The practice affects the poorest of the poor, people who have little or no alternative savings, most severely. It is, to say the least, a travesty.
The recent attack on the team of NIS Inspectors by a private businessman and his employees is perhaps not altogether surprising. Some business houses have been known to go to even further extremes to conceal irregularities. The presence of NIS officers can be construed as being inimical to the interests of workplaces bent on concealment, and some employers might conceivably resort to physical measures to prevent what they consider to be unwelcome intrusions.
In theory at least, the NIS boasts its own high-level official ‘minder’ in the person of Dr Roger Luncheon who is the Chairman of the NIS Board. Dr Luncheon is also a member of Cabinet. The government, therefore, must be fully aware of the problem of remittance delinquency. The mind boggles, therefore as to why the Scheme, with a Board Chairman as influential as Dr Luncheon, has, over the years, had to fight fierce battles with delinquent employers with little on their side save and except a ponderous legal system in circumstances where, for example, far more effective measures are in place for VAT remittances. NIS officers have told stories of defaulting businesses managing to liquidate their operations and disappear long before judgment is secured in the courts. Some have also expressed the view that the delinquency of some employers is influenced by an understanding that government will not come after them with anywhere near the same level of seriousness that applies in the case of VAT.
All this, of course, is just another way of saying that the government, by neglecting to strengthen the enforcement powers of the Scheme, must share the blame for the attack on the NIS officers. The bad blood that exists between the NIS inspectors and some business houses has been due in large measure to, on the one hand, the weakness of the Scheme’s enforcement powers and, on the other, the realization on the part of delinquent employers that officially, their delinquency is not taken anywhere near as seriously as it should be. The government can, without the slightest inconvenience to itself, remedy the problem. Why it refuses to do so is a mystery.
Such steps as have been promised by Dr Luncheon to protect visiting NIS officers should not be focused solely on providing assurances of their physical safety. These measures should be attended by the reading of a robust riot act against the delinquents with regard to both the timely remittance of NIS contributions and the keeping of their registers in order. One suspects, for example, that it would probably take no more than a stern public pronouncement on the matter from the President to bring the defaulters in line, a step which this newspaper advocated in its business supplement several months ago.
The other point that we have made is that concern by some private sector entities with NIS compliance is directly related to the fact that a compliance certificate is a necessary qualification for tendering for state contracts. Up to a few years ago the National Procurement and Tender Administration Board was battling with problems associated with the submission of outdated and forged certificates of compliance. More recent checks, however, indicate that mechanisms have been put in place to monitor compliances more closely.
Yet another problem that we had highlighted is the practice by some delinquent businessmen of offering bribes to NIS officials for compliance certificates to which they were not entitled. We hear less about that particular practice these days though that is not to say that it has been eradicated.
Up to about a year ago outstanding private sector employee remittances to the NIS totalled in excess of five hundred million dollars. A few companies were delinquent in the extent of amounts in the region of one hundred million dollars. The word from the NIS up to a few months ago is that over the past few years there has been no real effort by some of the defaulters to pay up.
Another problem that appears to interfere with the process – and some NIS officers say this openly – is that some businesses are given to parading what they say are their “connections,” holding forth suggestions that they enjoy official immunity from penalties associated with non-compliance. While one is only too well aware of the very real phenomenon of friends in high places, an allegation of official collusion in the avoidance of NIS remittances would be difficult to prove, though the Scheme’s confidence would certainly be boosted by a categorical official declaration that there is no back-door evasion recourse for delinquents.
As we have said before too, the private sector bodies – the Private Sector Commission, the Georgetown Chamber of Commerce and Industry, the Guyana Manufacturers and Services Association and the others – have an obligation to do what they can to help remedy the problem of delinquency. Here it has to be said that some pronouncements have been made though, again, we are unsure as to whether these have borne any fruit.
The most recent assessment of the state of the Scheme by the International Monetary Fund (IMF) makes far from encouraging reading. In commenting on risks to the sustainability of the Scheme the report notes that 2011 is likely to see an end to the pattern of modest surpluses and the beginning of a period of deficits resulting from increased benefits payments. The Scheme, the IMF says, has now arrived at a place where there is a mismatch between contributions on the one hand and the payment of pension benefits on the other. Employer delinquency has been identified as one of the reasons for this state of affairs. If, as the IMF has made clear, the role of the Scheme, both as a social safety net – particularly for working class Guyanese – plus the potential of the Scheme to secure lucrative earnings through local and overseas investments is under threat, then the government can ill afford to delay any longer in strengthening the mechanisms to deal with the delinquents.
As for last week’s utterly disgraceful incident, unless the government provides a clear and unmistakable signal that it will not countenance such outrageous acts by moving immediately to ensure the imposition of the harshest possible legal penalty on those responsible for and involved in the attack against the NIS officers, Dr Luncheon’s pronouncement on providing protection for the officers would not have been worth the time that he took to make it. More than that, inaction will embolden the delinquents, serve as a disincentive to the embattled officers and could even further compromise the viability of the Scheme.
