VAT collection on target but refund demands alarming
-- GRA head
Guyana Chronicle
March 1, 2007
COMMISSIONER-General of the Guyana Revenue Authority (GRA), Mr. Khurshid Sattaur said yesterday that, so far, the agency is on target with its collection, following the implementation of Value Added Tax (VAT).
He said GRA has received 79 per cent of the VAT returns from registered businesses but expressed concern over the alarming number of companies claiming refunds.
Sattaur, at an afternoon media conference in his Lamaha Street, Georgetown office, noted that the deadline for filing returns for the period January 1 to 31 was February 21.
According to him, the 79 per cent accounts for 1,674 of the 2,100 registrants and is comparable to results from any new tax measure.
Sattaur commended those who submitted timely returns and said it aided the smooth process. However, he warned that the 21 per cent defaulters are adversely affecting the system and will be penalised.
“They should be advised that our information technology system will enable us to quickly identify those who default on their VAT returns and will generate automatic penalties,” the Commissioner-General stated.
He advised those defaulting to quickly contact the GRA by way of letter to indicate that they will be filing late so penalty can be waived.
Sattaur reminded that, for each day businesses fail to file, an individual fine of $1,000 is applicable. If a defaulter is given a deadline and it is missed, each following day would attract a fine of $2.000.
He said the submitted VAT returns have been analysed and the number due for returns is being viewed “with great concern”. The entities requesting returns number 550 of the 1,674.
Sattaur said options available to the GRA include having the accounts audited or estimating the amount of VAT payable by examining the returns.
“We have quite a few options open to us to determine whether or not we accept these returns or to proceed to assess those based on the face value,” he explained.
Sattaur cautioned businesses to maintain accurate books and records that can be used independently to test and verify the accuracy of returns because the GRA is empowered, under the VAT law, to carry out examinations of the underlying records if discrepancies are found.
Despite this, the Commissioner-General pronounced that there has been a good beginning for VAT in Guyana and the GRA has already begun following up the businesses which have failed to submit returns on time and is also preparing to receive the next set of submissions and payments for February, which are due on March 22.
Meanwhile, the campaign to identify unregistered businesses will continue, Sattaur said.
He disclosed that the GRA has intelligence information that there are businesses that ought to be registered but have not.
“We are currently identifying those businesses that fall into this category and we will take the appropriate steps to have them registered,” as they should be aware that civil penalties of double the amount of tax they should have remitted, Sattaur pointed out.
Criminally, they could face a fine of $25,000 and imprisonment for up to two years, he said, noting that GRA is maintaining a close watch on prices charged for goods and, together with the Consumer Affairs Division of the Ministry of Tourism, Industry and Commerce, will continue to publish advertisements showing what charges should be paid under VAT as compared to what they were previously.
Sattaur acknowledged complaints that stores selling auto spare parts have been charging high prices for items and annnounced that an arrangement is being worked out with the public transport sector to effectively deal with such businesses.
He said GRA is prepared to publish suggested businesses where consumers should shop or places at which they should not, if the illicit practice continues.
Sattaur said, although GRA will do everything to protect the interest of consumers, they need to also protect themselves.
Shoppers should demand bills for purchases and report businesses which suggest they not collect receipts in exchange for not paying VAT on merchandise.
“We want to remind consumers that, if they choose VAT-free prices, they are allowing these businesses to get away with greater profits for their personal gain and they are contributing to fraudulent activities,” Sattaur stated.
He said, should an item bought be faulty, the consumer will not be able to seek redress without proof of purchase.