House approves income, VAT amendments for electronic returns, tributor’s tax reduction

The National Assembly on Wednesday passed amendments to the income and Value-Added Tax (VAT) laws to implement pro-mised changes, including the electronic filing of tax returns and the reduction in the tributor’s tax for the gold mining sector.

Government used its majority to pass the amendments, which were brought by Finance Minister Winston Jordan.

Once enacted, the Income Tax (Amendment) (No. 2) Bill 2017 will effect several changes to the Income Tax Act, including the provision of a reduction in tributor’s tax from 20% to 10% with effect from the starting of this year, a scale of the rate for income tax (withholding tax) for the gold mining sector, and the exemption of vacation allowance from taxation for private sector workers. The planned reduction in the tributor’s tax and the replacement of 2% tax on the gross proceeds from gold production, with a sliding scale percentage, ranging from 2% to 3.5%, based on the price of gold, had been announced by Jordan last December, during his presentation of the 2018 national budget.

Winston Jordan

The bill will also facilitate the exemption of taxpayers 65 years and over from having to pay fees for a TIN certificate and the reprint of a TIN certificate.

It will also see the amendment of Section 71 (1) of the Income Tax Act, according to the explanatory memorandum, to provide for the Commissioner-General of the Guyana Revenue Authority (GRA) to prevent persons “whether assessed or not” from leaving, without having paid tax due, until the prescribed conditions are satisfied.

The bill amends sections 82(5) and 86(6) of the Act to provide for a system to allow appeals of an assessment. It says a bond or guarantee in lieu of payment may be allowed where the disputed amount would cause hardship to the aggrieved person. The amendment of Section 86(6) will specifically effect a charge of 12% interest if the taxpayer is unsuccessful.

The bill also makes provision under Section 98 of the Act for a person aggrieved by an assessment to be able to lodge a bond or guarantee to the satisfaction of the Commission-General or pay the whole amount due before he can appeal the decision to a judge.

Electronic tax returns

Additionally, the enactment of the bill will see the insertion of new sections permitting the Commis-sioner-General to authorise the use of electronic technology to administer the act as well to provide for the filing of returns by the use of electronic media.

Similarly, the VAT (Amendment) (No. 2) Bill 2017, which was also passed, will allow the Commissioner-General to authorise the use of electronic technology in the administration of the Act. It caters for electronic documents and signatures, establishing hardware and software systems and to provide for any matter in relation to information and communication technology. It also caters for the lodging of returns by electronic media.

Additionally, the bill also deletes a Section 18(2) of the Act, which provides that a supply of goods or services that would be charged with tax at a rate of zero percent and not listed in Schedule II is not an exempt supply for the purpose of payment of VAT. The explanatory memorandum says the deletion of this subsection removes any inconsistency that may exist with the intended application of VAT. As a result, Section 18(1) is being amended to read, “A supply of goods or services is an exempt supply if it is specified in Schedule II.

Meanwhile, the Cus-toms (Amendment) (No. 2) Bill of 2017 was also passed. The bill, which is intended to amend the Customs Act, provides for the Commissioner-General of the GRA to be empowered where he/she is of the opinion that a customs value has not been properly determined, to reject it and substitute the valuation of a competent valuer.

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