Businesses face penalties for VAT violations -- GRA warns
Guyana Chronicle
December 15, 2006
THE Guyana Revenue Authority (GRA) has warned that businesses which do not register for VAT (Value-Added Tax) could face both civil and criminal penalties for failure to meet their obligations under the law.
The Government Information Agency (GINA) said not registering, inadequate bookkeeping and late returns and payments can also result in financial penalties and defaulters may be required to pay interest on any outstanding taxes due.
According to GINA, the GRA Commissioner General can, as well, initiate criminal proceedings against companies guilty of persistent or serious failings.
The agency said a business must register for VAT if its annual turnover of taxable supplies exceeds $10M per annum and, once registered, any taxes incurred in the course of procuring standard-rated or zero-rated merchandise can be reclaimed or offset against what has been collected from customers and must be paid to the GRA at regular monthly intervals.
This system also acts as an incentive for businesses to register, because unregistered entities will not be eligible to receive any refunds and would be liable to face penalties under the law, GINA stated.
It said the Commissioner General has the power, too, to search premises, seize documents, computer records and goods and temporarily halt the operations of a business, if there are reasonable grounds to suspect that a revenue fraud has been committed.
The GRA, however, has indicated that the intention is not to prosecute honest mistakes or misunderstandings, especially in the initial stages of VAT implementation, as the emphasis will be on education and assistance rather than enforcement, GINA explained.
The agency said the GRA advised that businesses, if dissatisfied with the ruling of the Commissioner General, can appeal to the independent VAT Review Board appointed by the Minister of Finance and decisions of that body could be appealed in the High Court, on points of law.
Where the appeal involves a disputed amount of tax, two-thirds of the total sum must first be paid before the appeal can be lodged, GINA said.
It said GRA reiterated its intention to administer VAT fairly and equitably and provide the business community and general public with comprehensive information, advice and assistance to ensure the effective implementation of the new tax.
VAT, to be implemented from January 1, 2007, is tailored to modernise the taxation system and broaden its base, ensuring that everyone who benefits from government social services pays taxes, GINA said.