The International Monetary Fund Fiscal Affairs Department (IMF:FAD) has advised that the government give complete authority to the Guyana Revenue Authority to hire and fire its employees following terms and conditions previously approved by the minister of finance.
Further, the department advised that Commissioner-General, Edgar Heyligar, be asked to present to his board, a credible plan of action for eliminating or reducing corruption to a minimum at the GRA and dramatically improving the work culture.
In the recent tax reform study, the IMF FAD, and not the US FAD, said that in setting up the GRA in January 2000, the government was not able dispense with the services of many tax and customs employees that the heads of the internal revenue and customs department did not wish to retain and these employees were retained en bloc. As a result, the report said, many employees whose past record made them unsuitable for continued employment, stayed on. And an important objective of the GRA, was not realized.
Commissioner of Customs and Trade Administration, Lambert Marks, the report said, was concerned that "some customs officials continued to work in league with traders to defeat the system, thereby reducing or removing revenue payments. The management problem that this creates is exacerbated by the fact that such malpractices are not confined to the lowest level of customs officials."
The study said that the dearth of practical customs experience was well illustrated in the GRA Employee Code of Conduct, much of which was contained in staff rules. According to that code, staff could be dismissed for offences such as failing to sign the attendance book, not submitting a medical certificate or leave application, gambling in the office, entering the premises over and under a fence, defacing notice boards or displaying notices without authority.
"Corruption, including collusion with taxpayers and traders to defraud the revenue is not directly mentioned. A code of conduct for tax and customs officials should directly address the problems that arise in practice," the report pointed out.
The report said that government officials had expressed concern about the large increase in the GRA budget, which was not matched with an improvement in tax collection, but said the mission viewed the increase as an investment in revenue collection necessary to strengthen the capacity of the GRA.
"The yield of such investment cannot be measured in short-term increase in revenues. The concern at this juncture therefore, should be less to do with the size of the budget. Rather, it should be focused on whether or not the GRA has taken key steps such as eliminating or reducing corruption to a minimum and dramatically changing the work culture at the GRA to ensure that these investments will yield a good return in the medium term," the report said.
The mission also suggested that one board member have a customs background and said it would be better if the post of deputy commissioner-general, currently vacant, was filled with a person with such experience to allow for a more balanced organization.
The report noted that the GRA was perceived by the Customs and Trade Administration management as being highly internal-revenue oriented (the commissioner-general is a former head of the IRD). The study said that no GRA staff member or board member had experience or first hand knowledge of customs technical matters or of the prevailing attitudes and practices of many staff members of the CTA. "It would increase the capacity of the GRA to understand problems that are peculiar to the management of the CTA and be beneficial to customs morale, if at least one board member had a customs background. To fill the post of deputy commissioner-general with such a person would even be better," the study said.
Given the above circumstances, the study said, it was difficult to see how effective supervision and control could be exercised. The study saw the need for the GRA to be given complete autonomy in managing its human resources. "The governing board and the commissioner-general should be fully aware that the CTA is not only a revenue-collecting agency. It is also a law enforcement agency that needs to maintain links with the security services and needs a good working relationship with and cooperation from the coastguard, police and defence forces," the report said. It also noted that the CTA had responsibilities such as control of prohibited and restricted goods and enforcement of certain international conventions unrelated to revenue collection. It saw the need for the CTA to be a member of and maintain contacts with international customs bodies.
The study also recommended that an information technology strategy be prepared for the GRA and for there to be a post-implementation review of the ASYCUDA system and a technical feasibility study for the implementation of the system.
The mission said many of the problems detected in its study would have been resolved or reduced if an effective information system were in place. The report noted that GRA employees who could be used in more productive tasks did a lot of manual work.
"Tax returns are visually examined, taxpayers are selected for audit manually and the audit and enforcement of arrears have very little support from IT. New IT systems would allow a considerable increase in GRA efficiency, effectiveness and a more transparent operation. Corruption would be made more difficult by the introduction of computerized monitoring systems," the report said. The report suggested outsourcing of a modern IT system as the reduced staff of 14 instead of 19 at the GRA would not be in a position to do this. The strategic plan for the IT operation, the team said, would determine the GRA’s needs in terms of software, hardware, communications and human resources. The report said that a review of the ASYCUDA system should be made to detect ways to improve the short-term use of the current version in terms of operational support and production of information to management and to the production of international trade statistics.
The mission noted that professional employees of the GRA needed to have permanent access to computers to improve the effectiveness of their work. For example, it was pointed out that auditors took two weeks to prepare computation and raise assessments but this would be considerably reduced if the process were computerized so that the auditor would have more time for new audits.
The mission saw the need for tax administration software to be implemented and for new and modern computers to be installed for all professional staff, while a new tax administration system integrated information of all taxes, including those administered by Customs.
The report also recommended that the GRA create a new audit unit, under the commissioner of Internal Revenue, incorporating the Field Audit Unit and the Verification and Investigation Unit.