The Guyana Revenue Authority (GRA) yesterday maintained that it has the power to garnish owed taxes from the US$2 million due to be paid to Dipcon by government.
The GRA made the pronouncement in a statement in response to a Guyana Times report, which it said quoted the Trinidad-based construction company’s attorney, Timothy Jonas, as saying that a demand for taxes to be deducted from such payment had been “thrown out by the court.”
GRA said it disagreed with Jonas’ “choice of language,” while noting that it could lead to a “misunderstanding of the effect of the Court’s ruling.”
According to GRA, the power to garnish the taxes from amounts due to Dipcon was merely deferred, since the acting Chief Justice Roxane George, in a 2018 ruling, had advised that the taxes could not be garnished at that time since a money judgment upon which Dipcon was awaiting had not yet been paid by government.
That judgment surrounds a more than US$2,228,400 debt owed to the engineering company by government for road construction works.
According to the GRA, the Chief Justice stated in her written decision that when the judgment is satisfied, it is then that the monies paid pursuant to the judgment would be deemed income for the purposes of taxation.
GRA quoted the Chief Justice’s ruling as saying, “Since the amounts awarded in the judgment are yet to be paid, and will be paid no earlier than in this year, 2018, corporation tax on that amount, if payable, can be charged no earlier than next year, 2019. Given this conclusion, and the purpose of this application, it is unnecessary for this court to determine whether the judgment amounts are exempt from corporation tax. That issue only arises upon payment of the judgment amounts and subsequent assessment of taxes due and payable, at which time it may be more fully canvassed.”
Against this background and pursuant to Section 102 of the Income Tax Act, GRA said that once its Commissioner-General “has knowledge or suspects that a person is or is about to become indebted or liable to make any payment to a person liable to make a payment of tax under this Act, he may, by registered letter or by letter served personally, require such first-mentioned person to pay the moneys otherwise payable to such second-mentioned person in whole or in part to him on account of the liability of the second mentioned person under this Act.”
The GRA added that as provided for by Section 102 (2), the receipt of the Commissioner-General for moneys paid as required under the section shall to the extent of the payment be a good and sufficient discharge of the original liability “(a) of the person who pays such moneys to the Commissioner-General to the person liable to make a payment of tax under the Act; (b) of the person liable to make a payment of tax under the Act to the Commissioner-General.”
The GRA explained that having learnt on Monday that the award to Dipcon would be paid by the Ministry of Finance, it served notice to the Financial Secretary and copied it to Jonas, instructing that the taxes outstanding by the company be garnished and paid over to the Authority as satisfaction of the said taxes outstanding.
Though a court in late June had ordered Finance Minister Winston Jordan to pay over the owed amount no later than Monday or face 21 days in jail, Dipcon has not received any money.
And while Jordan was liable to be held in criminal contempt for non-payment, President David Granger on Monday granted him a respite.
The Head of State invoked his power under Article 188(1) (b) of the Constitution to grant Jordan, both in his personal capacity and in his capacity as minister, “respite of the execution of the punishment until all appeals and remedies available to him and the state have been exhausted.”
Article 188 (1) (b) of the constitution says that the president may “grant to any person a respite, either indefinite or for a specified period, of the execution of any punishment imposed on that person for such an offence.”
The GRA also said that note should be taken that since Dipcon has ceased operations in Guyana, should garnishment not be effected, the Revenue Authority would have no jurisdiction over the monies collected once transferred out of Guyana.
It then went on to say that assertions by Opposition Leader Bharrat Jagdeo in the Guyana Times that the decision by the GRA to garnish the taxes due “sends a bad signal to investors and damages an already struggling investment climate” are therefore, flawed.
The GRA contends that it was simply carrying out its mandate in accordance with the Revenue Authority Act.
According to the GRA, contrary to Jagdeo’s claims, by ensuring the tax laws are administrated in a fair, transparent and consistent manner, whereby all individuals and companies, whether foreign or otherwise pay their rightful share of duties and taxes, this would lead to increased investor confidence.
Meanwhile, Attorney General Basil Williams in response to an article published in this newspaper on Wednesday, said that he has not withdrawn an appeal against a stay he was denied on the judgment ordering Jordan to pay Dipcon or be imprisoned. According to him, what he withdrew is his motion seeking leave to appeal.
