Despite the “hue and cry” about the application of Value-Added Tax (VAT) to private education last year, “all but six” private schools are now before the court for failing to file returns and for the non-payment of taxes they would have actually collected on behalf of the Guyana Revenue Authority (GRA), Commissioner-General Godfrey Statia said yesterday.
Statia told a press conference that Guyanese taxpayers evade paying taxes in every category and that the GRA would have earned approximately $70 billion more than it did in 2017 if everyone paid their fair share.
He noted that the high rate of tax evasion has resulted in several court cases, including at least 30 against private education institutions.
He stressed that while the institutions have collected VAT from increased tuition fees and deducted the Pay As You Earn (P.A.Y.E) contributions from their teachers, they are not remitting these monies to the authority.
“In November, I had to take all but six private education institutions to court for failing to file returns and for nonpayment of the taxes they would have collected on behalf of the Revenue Authority,” he said, before adding that now that the VAT measure has been repealed, tuition fees have not decreased.
Statia advised parents to ensure that they are not still paying VAT.
The government made the 14% VAT applicable to private education fees from the start of last year, resulting in protests by both citizens and schools. Finance Minister Winston Jordan announced the withdrawal of the tax as a 2018 budget measure.
The Commissioner-General also noted yesterday that if the top 10,000 taxpayers in the country paid the right taxes, then the taxes for the rest of the populace could be reduced. “60% of our revenue is centred around 300 taxpayers and that includes corporate and a few individual taxpayers. Those who are individual taxpayers are persons who just because of the rate differential have elected to remove themselves from the corporate bracket… if you could capture everything from those 300 persons, their percentage of total revenue will move to 70% since many of these companies there are directors, owners and shareholders who would spread that base to 1,000,” Statia said.
‘At all levels’
However, currently tax avoidance is rampant across all taxpayer categories, with lost revenue equal to between 30% and 40% of actual collection, which is equivalent to a sum of approximately $70 billion for 2017 alone.
“If we had that I’m sure the Minister of Finance would be able to balance his budget and capital projects would be completed,” Statia suggested before adding that for last four months of 2017, GRA’s enforcement division collected more in taxes than in the entire 2016 and first eight months of 2017.
“Tax evasion is at all levels… at Customs there is under-invoicing, under-declarations. They use the incorrect code. Codes move from 0 to 40% and if the broker and declarer collude to use the incorrect code, GRA loses…A simple analysis will show people have been using incorrect descriptions,” he stated.
According to Statia, simply by getting rid of some of the miscreants and rotating staff, a significant increase in revenue was realised in the last third of the year. “It’s a countrywide issue. Whether we like it or not, we need to understand that collusion is alive and well and not only in the public but also in the private sector… we have lost all discipline, value systems have been broken down not only at GRA but countrywide,” he lamented, before adding that a few cases are in front of the police.
However, the authority is more likely to charge a taxpayer faster than one of its staff members because of the burden of proof required to institute such charges.
Staff members are more likely to find themselves terminated “with cause” after going through a “grievance process,” which is less bureaucratic than that used in the public service.
“We are not in the public service. We are a corporate body which is semi-autonomous. We terminate you for cause,” Statia stressed, while noting that in his 18 months as Commissioner-General almost 100 persons have been sent home. These persons range from one Assistant-Commissioner, who has since instituted court proceedings, all the way down to clerks. “He was terminated and now has me in court because we allowed him to go instead of charging him. He has taken me to court for dismissing him without notice and giving him three months’ pay. They have reached a stage even when they wrong they think they are right,” Statia said of the lawsuit, while refusing to name the former worker.