The Guyana Revenue Authority (GRA) is continuing to assess dozens of Investment Development Agreements (IDAs) signed before the tenure of Commissioner-General Godfrey Statia in 2016 and has found that many individuals and companies have robbed the state of hundreds of millions in taxes.
“We are constantly looking at them to see if they are keeping their end of the bargain. We have been finding lots and lots of irregularities because persons have not been using their IDAs for the purposes in which they were given. They have been breaching it in one way or another,” Statia told the Sunday Stabroek in an interview.
“For instance, in some IDAs you see persons getting vehicles, high-powered vehicles that have no relevance to their projects… robbing the state of hundreds of millions and I’m not talking about the ordinary man, these are businessmen and companies that can afford to pay the taxes,” he added.
The Commissioner-General explained that the review was of businesses located countrywide and those signed with foreign investors and they date back to before he began heading the tax agency.
From the analysis done of some of the files pulled, Statia said that the provisions in the IDA did not match the investment type. “I am not talking about now, that is current IDAs signed, I am talking about past IDAs. “As a matter of fact, there are some IDAs where concessions should not have been given in the first place. In those cases, we have to go back and review them,” he said.
But he explained that tax recovery is an uphill task for the agency as the businesspersons try everything in their power to resist paying the state its due, with some even turning to the courts to not have their equipment and vehicles seized. “People will try everything to not pay. We have had persons take us to court when we would have seized equipment. One person took us to court for seizing the equipment and we won the court case,” he added.
Seen by many observers as a ‘No Nonsense’ tax agency head, Statia has maintained that collection of taxes and providing assistance to taxpayers was his main objective and will be handled in a nonpartisan and unbiased manner. “I have no friends when it comes to collection of taxes and no one dare call me to ask me favours. That is not how a tax agency is run,” he said.
This newspaper has received complaints from some business persons and attorneys who have bemoaned GRA’s rigid tax collection and vigilance on concessions given. “GRA like they are going crazy. We have them in court for a matter right now because they claim that there is an abuse of the IDA given. I don’t know what system they use to determine what should or should not be or if they have qualified persons there to even evaluate or measure how the concessions are used and how much taxes should paid,” one attorney said.
Similar views were expressed by a Georgetown businessman, who questioned the method of GRA’s measurement of how businesses honour the respective IDAs given. “They do not go with a checklist, accountants, and auditors, experts in the business or nothing. I am telling you, I don’t know how those people measure or know what to look for. They come, walk around, take two notes and leave…there is nothing structured,” the man said.
Only recently, local seafood company Pritipaul Singh Investment Company decried the GRA’s seizure of two boats with fuel from its establishment, saying there were no breaches and it was acting in accordance with an agreement government signed with trawler owners and seafood operators back in 2005, but which is renewed biennially.
However, this newspaper understands that a settlement was reached between Pritipaul Singh and GRA, where the company agreed to pay the taxes the agency stated it was owed.
Statia, who is a Chartered Accountant and an attorney, was asked about those investigations and explained that he could not discuss the Pritipaul Singh case or individual tax cases. However, he maintained that the GRA acts only under the law and if there are any seizures or fines against individuals or businesses, they would be preceded by investigations and due diligence processes.
According to the agreement between the Government of Guyana (GoG) and the Guyana Association of Trawler Owners and Seafood Operators (GATOSO), signed in 2005 under the Bharrat Jadgeo administration, strict provisions are made so that diesel could be stored on vessels as “ships stores” and exempted from taxes as provided for by Section 188(b) of the Customs Act. GRA secures the right, according to the agreement, to audit the records of all of the beneficiaries named in it.
Eleven (11) vessels are listed, according to Schedule A of the document, as those given approval to import diesel, as per the agreement. There are thirty (30) prawns vessels and eighty-seven (87) sea bob vessels listed in Schedules B and C, respectively. Schedule D deals with four wharves approved by the association, while Schedule E names the seven (7) approved processing plants.
“This agreement applies only to the diesel imported by the Association which has been manifested and classified as ships’ stores,” one of the General Conditions of the agreement, intended only to benefit authorised members, states.
“Temporarily diesel will be imported into Guyana by the Association on vessels proposed by the Association and authorised by the GoG…and shall be transferred to the listed trawlers owned and operated by authorised members of the Association, generators used in powering the seafood processing plants approved by the Association, as well as generators used by ice plants operated by the owners of the authorised importing vessels and authorised trawlers (listed in schedules A,B,C) solely for the production of ice for the Association’s fishing vessels, as defined in section 17 of the Special Conditions,” it adds.
The agreement notes that the diesel shall only be imported in the authorised importing vessels less it be forfeited. “The said diesel shall be transported only by the authorised importing vessels and authorised trawlers and same shall be used for the purposes so agree in this agreement and shall not be sold or disposed of to third parties. Failure to act in accordance with this provision will result in forfeiture of the said diesel,” the agreement further says.
Failure to comply with the clauses of the agreement subjects the member to removal from the list, pending review by both GRA and the Association.
“Any approved member found in contravention of the terms and conditions herein contained shall not be precluded from the imposition and payment of the respective taxes to the Guyana Revenue Authority. Failure to pay the respective taxes shall result in suspension of membership,” it adds.
Government also reserved the right to terminate the agreement at any time.
This newspaper was informed by sources that there has been an abuse of the agreement where fuel is being brought into the country in amounts greater than what is catered for, it is also being used for purposes other than what was intended and is even being sold to third parties. This is perhaps why the GRA has zeroed in on not only the breach and abuse of the agreement but overall fuel smuggling.
Statia would only say that his main objective was to “ensure the state gets what it is due” even as he added that monitoring of IDAs and tax evasion “is an ongoing process.”