It is hard to imagine that one official of an 11-month-old government could have gotten himself into so much trouble on so many fronts. That is exactly what the Minister of State Mr Joe Harmon has done and from all that has been made public and the information that is still to be provided it is difficult to see how there can be any restoration of his credibility. Mr Harmon’s predicament puts President Granger on the spot as he must now salvage the credibility of his government and governance. It must serve as a salutary warning to this administration. The citizens of this country are in no mood for deceit and duplicity. They have had many years of it. Too many. The May 11 elections was meant to transform the political culture and bring with it unwavering probity in the discharge of government functions. It clearly hasn’t.
After weeks of pressure in which he chose to stay silent on a number of troubling allegations when he had been previously voluble on everything without care for protocols, the Minister of State issued three statements on Thursday about the appointment of Mr Brian Tiwarie as an advisor, his trip to China and what he termed “a request for delay of action against Baishanlin by GRA”. The contents of the statements were addressed in yesterday’s editorial. The third statement bears even greater scrutiny for at the core it represents an abuse of power and interference with the autonomous Guyana Revenue Authority.
Mr Harmon’s version of what transpired, stripped of many important details is as follows:
“On Thursday March 17, 2016 representation was made to me by an official of the Embassy of the People’s Republic of China in Guyana on an urgent matter affecting one of their national’s company operations in Guyana. I was advised that personnel of the GRA had gone to the premises of Baishanlin in furtherance of a Tax demand by the GRA of G$1.5 billion dollars.
“The GRA personnel were intent on seizing movable assets of the Company. The Chinese official explained that the principals of the Company were not in Guyana and requested a stay of execution of the GRA’s action for 14 days pending the return of those principals, at which time they would go into the GRA to settle their indebtedness. The Embassy officials also gave the assurance that none of the assets of the Company would be removed, during that grace period.
“Considering the importance of Guyana/China relations and the urgency of the matter, I made contact with the GRA and requested the facility. This request was granted. At the expiration of the 14 days requested, the GRA proceeded with its work.”
The first thing that needs to be said is that Beijing seems to know better than average folk here where the power centres in this country lie. Who would have known that the Minister of State would have been the first port of call for a foreign state seeking to represent the interest of one of its companies and in a huge tax matter at that? While the country no doubt values its longstanding and fruitful relations with China, it was entirely inappropriate for its embassy to seek to influence a tax matter between one of its companies – in this case the perennially controversial, Baishanlin and the GRA. After all, Baishanlin’s relationship with the GRA would have developed within the ambit of an investment framework and the tax laws of the country. The two have a long history of engagement including the notorious and wasteful development by the company of a car park, gratis, along Lamaha Street for the GRA’s use. That development did raise concerns several years ago about whether the GRA was compromising itself. The point is that the GRA’s demand for $1.5b would have come at the end of a lengthy engagement with Baishanlin within established parameters and it was wholly unacceptable of Mr Harmon to contemplate short-circuiting that process particularly since he would have been aware that his government and the GRA wanted to be insulated from any actions that reeked in any way of political interference in tax matters.
Mr Harmon has not disclosed as yet the level at which the appeal from the embassy came but he surely should have counseled the official that such matters were outside of his bailiwick and that the most he could do would be to convey their concerns to the relevant authority and that Beijing should raise the matter formally with the Foreign Ministry here. It surely was not a matter that required some emergency intervention as the tax demand would have matured over an extended period and the company would have had room to manoeuvre. Levying on movable assets in settlement of a debt is a serious step and Mr Harmon should have known that he had no role there.
While endowed with responsibility for many areas and with easy access to the Presidency, Minister Harmon should have done nothing more than pass on to the GRA the concerns raised by the embassy even as GRA should have been unmoved by it. Unfortunately, Mr Harmon said that he contacted the GRA and requested the two-week delay in the levying in light of the importance of Guyana/China relations. This is hogwash. Ties between the two countries were never at risk and certainly not over this. What Minister Harmon omitted in his statement is who at the GRA he contacted. Was it the acting Commissioner General or some underling? Why would anyone at the GRA believe that the Minister had the authority to intercede in tax demand matters? For some time now there have been reports that certain officials at the GRA had been conduits for instructions from government officials. If this was one of the cases it must quickly lead to the GRA shutting down this channel. It must be noted that even after the 14-day grace period, Baishanlin did not make good on its reported commitment to meet its tax obligation and with the glare of public scrutiny on it, the GRA proceeded to levy on the company’s property.
On January 10 this year in his column in the Sunday Stabroek, the relatively new Chairman of the GRA board, Mr Rawle Lucas had this to say about enforcement actions of the revenue body.
“When tax collection reaches the stage of enforcement, the demands of GRA become more onerous for the taxpayer. At this stage, one could expect some level of confrontation with taxpayers. This enforcement responsibility of GRA is demanded by laws governing revenue collection and is executed primarily by the Law Enforcement and Investigative Division (LEID), the Debt Management Division and the Tax Audit Division.
“Their efforts are eventually backed up by the Legal Services where necessary. Taxpayers must understand that GRA’s employees are required by law to enforce revenue laws where voluntary compliance is lacking. One therefore must not view GRA officers as villains, for they are not. They are humans with an interest in success at their work like every other Guyanese.
“At the same time, one understands how intimidated taxpayers can become by the power vested in GRA enforcement officers. Anxiety, desperation and inconvenience could all add up to a state of vulnerability that forces taxpayers into engaging in what they might believe are transactions of relief. Taxpayers who succumb to frustration and harassment and engage in illicit transactions are themselves breaking the law and expose themselves to prosecution.”
This is the philosophy of the GRA which Minister Harmon should have acquainted himself with instead of his embarkation into folly. The events surrounding Mr Harmon’s actions at the GRA raise serious questions about the sincerity of this government in ending the scourge of interference in autonomous agencies and independent bodies. It behoves the leadership of these agencies to exercise vigilance and to resist uninvited attempts to influence their activities. It would not have gone unnoticed to keen observers that shortly after his interference in the GRA, Minister Harmon proceeded on a trip to China where he was in contact with representatives of Baishanlin, a sequence of events that adds to growing concerns about his behaviour particularly as there are many questions still to be answered.
Taken all together, Mr Harmon’s appointment of Mr Tiwarie unbeknownst to many in his own government, his interference in GRA and his questionable trip to China raise larger issues about the leadership of this government and how its authority is being expressed.
