VAT warning
Guyana Chronicle
December 21, 2006
WITH the December 31 registration deadline fast approaching for businesses to register under the Value Added Tax regime coming into force from January 1, the Guyana Revenue Authority (GRA) has warned those who have not yet done so to comply.
Acting Commissioner of the GRA VAT Department, Hema Khan is urging persons who were contacted about queries for their VAT registration applications to respond early.
Khan said the VAT Department had some queries with a few persons but several of them have not responded to the queries, resulting in a delay in the completion of their registration process.
“It is important that these persons make contact with the VAT Department to complete the registration process to ensure timely receipt of their certificates”, the GRA said yesterday.
It said ms. Khan is also encouraging other business persons who have queries about the registration process to contact the VAT Department as early as possible so that they are registered before the stipulated December 31, 2006 deadline.
Mrs. Bridget Abraham, Assistant Commissioner, Operations, noted that there are five working days remaining and businesses should avoid the last minute rush to secure their certificates before January 1, 2007.
She said while the law gives the Commissioner-General 10 days to register an applicant, the VAT Department is working diligently to issue certificates within two days of receipt of the application.
Registration for VAT began on October 1 this year. The deadline for persons who will be eligible to charge and collect the tax from January 1, 2007 is December 31, 2006.
So far more than 1,600 businesses have registered with the VAT Department, the GRA said, adding that it will publish a list of the registrants shortly.
The authority said it is analysing the tax roll to determine persons or businesses that should be registered but who have not yet done so and will take the necessary action.
The VAT law gives the Commissioner-General the authority to register persons who should be registered. In addition, there are civil and criminal penalties which may apply.
The civil penalty, the GRA said, is equivalent to double the amount of output tax payable from the time the person is required to apply for registration until the person files an application while the criminal penalty is $25,000 and two years imprisonment.
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.
The GRA 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.
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.
The government says VAT is tailored to modernise the taxation system and broaden its base, ensuring that everyone who benefits from government social services pays taxes.