Guyana’s sweet concession packages can be accessed by both foreign and domestic companies.
These incentive packages for investments opportunities are divided into several sectors designed to suit the unique nature of the relevant sectors. However, it is important to note that tax holidays are not automatic and investors must satisfy internal agency guidelines and rules before benefiting from any form of tax benefit.
Once the investor has prepared and submitted a proposal Guyana’s new and improved Office for Investment otherwise known as Go-invest issues a letter or sometimes a Memorandum OfUnderstanding (MOU) setting out the known tax incentive regimes that are applicable to the type of investment.
Go-Invest’s recommendations on tax incentives are usually based on the level of the investment expected in the project, the level of employment to be created by the investment, the financial capability of the investor and the viability of the investor’s proposal.
Where the conditions precedents set out in the letter/MOU are satisfied by both the Government and the Investor, an Investment Agreement (IA) is prepared with recommendations of tax incentives by Go-Invest and sent to the INVESTORS GO-INVEST Proposal is discussed.
Meetings are set up with relevant state agencies and if Investor chooses to continue Go-Invest issues letter setting out incentives and confirming general terms of the investment Further talks leads to an MOU.
State Agencies take over with requisite applications etc. Investment Agreement (IA) containing incentives, is drafted and forwarded to Guyana’s Revenue Authority (GRA) for review.
Once the I.A. is in order it is executed by the Ministry of Finance and Investor July 2008 Fiscal Incentives framework for Investment 14 Guyana Revenue Authority for vetting and finalization.
An Investment Agreement also lists the machinery, equipment and other items that are usually exempted from Custom duties. The listing of these items in finite detail is paramount to the issue of transparency and acts as a check and balance in the system to prevent abuse of Investment Agreements.
It also provides the GRA with the ability to properly monitor and administer its functions as it relates to tax- and non-tax payers alike. Listing items eligible for exemptions allows the GRA to compute the value of exemptions granted for which it must account to the public for by publication.
The GRA then reviews the draft Investment Agreement using pre-existing customs, policy guidelines and the law to determine the incentives applicable to a project. It sometimes proceeds to call the Investor in to negotiate the terms of the Investment Agreement. Once GRA is satisfied with the Investment Agreement it is sent to the Minister of Finance with a recommendation for signature.
Below are some of the concession packages and what they offer.
General Incentives
- Exemption from Customs Duty on most plant machinery and equipment
- Exemption from Customs Duty on raw materials and packaging materials used in the production of goods by manufacturers
- Exemption from Customs Duty and zero rate of Value-Added-Tax on raw materials and packaging for manufactures who export 50 percent or more of their products
- Unlimited carryover of losses from previous years
- Accelerated depreciation on plant and machinery for approved activities
- Full and unrestricted repatriation of capital, profits and dividends
- Benefits of double taxation treaties with the United Kingdom , Canada, Kuwait and Caricom countries
- Exemption from Customs Duty and zero rate of Value-Added-Tax on items approved under an Investment Agreement between the Government and the business
- Exemption from Excise Tax on items approved under an Investment Agreement between the Government and the business
- Zero rate of Value-Added-Tax on exports
Tax holidays for projects that meet the requirements specified in the In-Aid of Industry Act
Agri-business
- Exemption from Customs Duty on a wide range of machinery and equipment for land preparation, cultivation, harvesting – tractors, combines, bulldozers, excavators, etc.
- Exemption from Customs Duty on a wide range of agro-processing equipment – sorting and grading of seeds, fruits presses and crushers
- Zero rate of Value-Added-Tax on harrows, scarifiers, ploughs, weeders, hoes
- Exemption from Customs Duty on fertilizers, insecticides, fungicides, weedicide, herbicides, inoculants
- Zero rate of Value-Added-Tax on fungicide, herbicide, weedicide, pesticides, fertilizers
- Exemptions from duties and taxes from items covered under an Investment Agreement
Forestry
- Exemption from Customs Duty of a wide range of forestry and saw milling equipment – skidders, band saws, gang saws, chain saws, saws blades, etc.
- Exemption from Customs Duty on a wide range of wood working equipment – lathes, sanders, routes, saws
- Exemptions from duties and taxes for items covered under an Investment Agreement
Mining
- Exemption from Customs Duty on a wide range of mining equipment – for sorting, screening, separating, washing, crushing, grinding, mixing or kneading earth, stone, ores or other mineral substances; rock drilling or earth boring tools; furnaces and ovens for roasting, melting or heat treatment of ores, pyrites or of metals
- Exemptions from duties and taxes for items covered under an Investment Agreement
