Duty, tax exemptions increased by 92% to $134B in 2018

The Guyana Revenue Authority (GRA) in 2018 granted duty and tax exemptions to individuals and businesses totalling more than $134 billion, which represents an increase of 91.97 per cent when compared to the exemptions granted in the previous year.

This was revealed by Auditor General. Deodat Sharma, in his 2018 Audit Report which was handed over to Speaker of the National Assembly Dr Barton Scotland in September of last year.

According to the report, the $134 billion in exemptions represents an increase of $69.9 billion when compared to 2017 when 64.3 billion was granted.

In providing a detailed breakdown, the Audit General explained that tax exemptions granted to companies and businesses represented 90.1 per cent or $104 billion of the total exemptions granted.

For that year, 1.034 duty and tax exemption applications were made by ministries and government departments, and more than $4.4 billion were granted. Additionally, more than $2.5 billion in exemptions were granted for foreign-funded projects, $1.8 billion for churches and charitable organisations, and $988 million for re-migrants.

Sharma said in his report that the total value of tax exemptions granted in respect of Investment Agreements facilitated through the Guyana Office for Investment (Go-Invest) and the Guyana Geology & Mines Commission (GGMC) could not have been determined.

As such, a review of the records of GRA revealed that there were only 280 exemption agreements in which 241 were approved, two processed, 36 cancelled and one sent for additional information in 2018.

With the absence of similar information in 2017, GRA’s management had committed to ensuring that its Information Technology (IT) division would fully implement a system that will facilitate a breakdown of the ‘Companies/Businesses’ category so that more informative reports could be generated.

But according to the 2018 report, at the time of reporting in September 2019, the Authority still failed to provide evidence of these breakdowns in tax and duty exemptions.

GRA in response said that it’s IT Division had commenced the exercise of the implementation, but that several challenges made it unsuccessful.

In its recommendation, the Audit Office advised the GRA to continue its efforts to have the information available and to present same to facilitate audit procedures. Additionally, it recommended that the Authority take all necessary steps to monitor the tax exemption process and to carefully administer the exemptions.