Since the news of an apparent abuse in the grant of duty-free concessions to two remigrants, I have been tempted to do an article on the Remigrant’s Scheme with a view to identifying any shortcomings that might have contributed to this apparent abuse. What prompted me to proceed to writing this article was a letter appearing in one section of the print media calling on me in my capacity as President of Transparency Institute Guyana Inc. (TIGI) to issue a condemnatory statement concerning the apparent abuse. I am, however, no longer the President of TIGI, having demitted office on 31 August 2014. I am also not in the habit of commenting on issues without due reflection.
Brief History of the Remigrant’s Scheme
The Remigrant’s Scheme started sometime after the 1992 General Elections, perhaps earlier, as an incentive to encourage Guyanese living abroad to return home and assist in the development of the country. The Office of the President initially administered the Scheme but in February 1993, the Ministry of Foreign Affairs assumed the responsibility for determining the eligibility of applicants for the grant of remigrant status.
Once all the criteria were met, the Foreign Ministry issued the letter of approval for remigrant status, and the Ministry of Finance granted the duty-free concessions. The Guyana Revenue Authority (GRA) then processed the concessions. Some years later, the Finance Ministry’s involvement ended after there was a discovery of forgery of some 50 approvals for remigrant status.
Requirements for Remigrant Status
A remigrant is a Guyanese citizen born at home or abroad, or a Guyanese citizen by naturalization, who has been granted remigrant status with the understanding that he/she will remain in Guyana for at least three years. The applicant must be 18 years old and over who was legally residing abroad for no less than four consecutive years. For graduate students, the period is three years. A person is not eligible if he/she has been granted duty-free concessions as a remigrant during the past ten years. A deportee is also not eligible.
A remigrant’s family may include a non-Guyanese spouse and children. They are also eligible for remigrant status. In addition, in cases where a person has renounced his/her Guyanese nationality in order to obtain citizenship in the country where he/she currently resides, the person is eligible.
Procedures to be followed
The prospective remigrant is required to visit the Foreign Ministry within three months of his/her resettlement in Guyana for an interview. He/she must complete the required application form and present the following documents:
- Current and previous passports;
- Certified copies of annual income tax declarations for each of the last four years resident overseas;
- For a returning student, a letter from the educational institution he/she attended while abroad confirming the duration of his/her study at the institution;
- Documentary evidence of means of earning a living in Guyana;
- A complete and quantified list of the items on which concessions are requested;
- A letter from GT&T stating that any telephone/fax machine in the list is compatible with the system operated by GT&T;
- A permit from the National Frequency Management Unit (NFMU) in respect of operations of any satellite dish;
- A permit from the Commissioner of Police to import and use any firearm and/or ammunition;
- The registration/certificate of title of the vehicle confirming ownership for at least six months as well as a certificate from the dealer confirming the engine capacity of the vehicle; and
- A sworn statutory declaration that the prospective remigrant will reside in Guyana for at least three years.
Once all the criteria have been met, the Ministry issues a letter for the grant of remigrant status and for access to duty-free concessions. The remigrant then takes his/her letter of approval and all supporting documents to the GRA for processing, which includes the payment of the residual customs duty, consumption tax and purchase tax, and the subsequent release of the goods.
Personal & Household Effects, Tools of Trade and Vehicles
Duty-free concessions are granted on reasonable quantities of personal and household effects as well as tools of trade. Personal and household effects include domestic and electrical appliances but not liquor, foodstuff, construction materials or fixtures. On the other hand, tools of trade refer to “that type and amount of instruments, tools, equipment, devices and machinery as would be usually used in the normal course and scope of a person’s profession, trade or occupation without utilizing additional labor.” They do not include vehicles. Household effects and tools of trade are, however, subject to the payment of a 5% customs duty.
A remigrant is allowed duty-free concessions on one motor car up to 2,000 cc, subject to payment of the 5% customs duty. For a motor car exceeding 2,000 cc, he/she has to pay the pro-rated customs duty, consumption tax and purchase tax on the excess of engine capacity. In respect of vans and 4×4 vehicles, such as jeeps and pick-ups up to 4,500 cc, the remigrant pays 5% customs duty. No concessions are granted on trucks and vehicles exceeding 4500 cc, except in the case of motor cars. The grant of duty-free concessions is valid for six months from the date of issue.
Assessment of the Scheme
The Remigrant’s Scheme appears to be a worthwhile and beneficial one, considering the level of ‘brain drain’ that has been taking place over since the 1970s and perhaps earlier. However, there is no evidence that any dedicated study was carried out to ascertain the effectiveness of the Scheme, especially as regards any net benefit to the country arising from the concessions granted. Are we getting the desired value for money from the Scheme, considering the extent of the remission of customs duty, consumption tax and purchase tax? Are some remigrants using the Scheme for personal enrichment, given the absence of effective monitoring of the Scheme?
The 2012 Population Census clearly indicated a significant degree of migration. While the Scheme’s objective is to provide an incentive for Guyanese residing abroad to return home, it is by far outweighed by the extent of migration that is taking place, with no similar or other incentives in place to stem the outflow of the much-needed skills. It is public knowledge that over 80 per cent of our students leave our shores for greener pastures upon graduation. In the circumstances, it will be more worthwhile and beneficial for the issue of migration to be urgently addressed by providing the necessary incentives for experienced and skilled persons to remain in the country and help to develop it. A critical component relates to assistance in providing suitable employment for the University graduates with salaries and conditions of service commensurate with their training and experience.
We are all aware of the several cases where officials retire from their public service positions and are re-employed on a contractual basis the very next day at significantly higher compensation packages, including duty-free concessions on motor cars every three years. This practice provides a disincentive for aspiring University graduates and professionals to remain in the country to serve. Upward mobility within the public service is also stifled. In other countries, if special circumstances dictate the necessity to retain the services of an individual beyond his/her official retirement age, the person’s retirement is extended accordingly. The individual does not enjoy both superannuation benefits and a salary at the same time. At the United Nations, a retiree can only be re-employed, and in a lower position, for a limited period. In this new position, he/she cannot earn in excess of a certain amount, otherwise the retiree’s pension payments cease. Here in Guyana, affordability appears not to be an issue, notwithstanding that our per capita income for 2013 was US$3,410, thereby relegating us to the poorest country in the CARICOM region, except for Haiti.
There is no evidence that follow-up procedures are in place to ascertain any help a remigrant may need in the settling-in period and in the pursuit of the economic activity identified in his/her application for remigrant status. Nor is there evidence of any procedure to ensure that a remigrant does not return to resettle in his/her previous country of residence, or any other country, within the stipulated three-year period. This is a significant shortcoming of the Scheme that is open to widespread abuse.
More important is the fact that the remigrant’s statutory declaration does not include a requirement precluding him/her from disposing of his vehicle within the three-year period. Although the GRA provides some measure of checks and balances to prevent this from happening, there is nothing that precludes a remigrant from entering into private arrangement with a buyer with the understanding that the legal ownership will be transferred after the duty-free period has ended. This appears to have been the case of the two remigrants referred to at the beginning of this article. However, taxpayers’ matters are confidential and therefore the GRA should not have allowed itself to be a party to any public disclosure. One hopes that the GRA would undertake a comprehensive exercise to ascertain the extent to which similar abuses are taking place, to allay fears that selected individuals are being targeted for whatever reason(s). It is no secret that there is widespread abuse of duty-free concessions being granted on motor vehicles.