In reference to a letter from the Guyana Revenue Authority (GRA) published in the October 14, edition of Stabroek News captioned ‘The Corporation Tax Rate for non-commercial companies was reduced in 2017’, I wish to quote from my letter on from October 11, 2017 which stated:
“With respect to corporation taxes (CTAX), according to the Ram & McRae website, there are three rates of CTAX in Guyana: a 30% rate that applies to non-commercial companies, a 40% rate that applies to commercial companies except telephone companies and finally a 45% rate for the telephone companies.”
I sourced my information from the tax experts in Guyana and they said 30%, and I accepted it and yes, I am responsible. To their credit, Ram & McRae did contact me to advise that their website had not been updated and acknowledged the inaccuracy. They subsequently updated their website and thus the inaccuracy is acknowledged. So a good thing was done because of my letter: the Ram & McRae website is fully updated as we speak. If one reads the Ram & McRae website today, it offers enough information for me to make the following statement which I have cross referenced with the GRA website: “there are three rates of CTAX in Guyana: a 27.5% rate that applies to non-commercial activities, a 40% rate that applies to commercial activities except telephone companies and finally a 45% rate for the telephone companies.” But it is unfortunate that the GRA took the liberty to point out that there were “several inaccuracies” in my letter but then only mentioned one, as discussed above.
I want to make it very clear if the 27.5% rate is used for non-commercial activities, it does not negate the call that there is a need for a reduction in the Corporation Tax. The progressive countries in the neighbourhood have an effective CTAX rate band that starts at 25% and thus Guyana’s band, which starts at 27.5%, is still uncompetitive regionally.
So GRA appears to be emitting hot air. It is my understanding when you refute a position you offer an alternative position, but GRA offers none. Well in the democracies in which I have lived (Guyana after 1992, UK and the USA), when you refute a position, you explain yourself and bring closure to your statement. I am saying that 27.5% is greater than 25% and thus the conditions still remain for tax avoidance, transfer pricing and discouraging investment. What is GRA’s reason for refuting this argument?