Grace Kennedy Remittance challenges VAT levy
Kaieteur News
February 18, 2007
Grace Kennedy Remittance Services (GRKS) has moved to the courts seeking to have the Guyana Revenue Authority refrain from applying a Value Added Tax on commissions charged by the GRKS on monies sent to and from Guyana to the various recipients.
Representing the remittance services is Attorney-at-law Stephen Fraser.
In a writ filed in the Supreme Courts, Fraser is seeking an order nisi against GRA Commissioner General Khurshid Sattaur and Assistant Commissioner, Ms Deanah Matthias, restraining them from applying VAT to the commission.
Country Director of GRKS, Anna-Lisa Fraser-Phang said that GRKS is an agent of Western Union in Guyana. She added that tax consultants Jack A. Alli and Sons had sought clarification of the VAT implications through meetings with a GRA official who stated that “Commissions earned by the applicant for remittance services will be exempt for VAT; and that commissions earned by sub-agents may be charged to the applicant depending in the VAT status of the sub-agent.”
But subsequently the GRA stated that “a supply of financial services” would be subjected to VAT. However, the VAT regulation exempted “transactions concerning money (including the exchange of currency) deposit, savings, and current accounts, payments, transfers, debts, cheques or negotiable instruments other than debt collection and factoring”.
In a letter dated December 7, 2006, Ms Deanah Matthias wrote to the tax consultants explaining that “Commissions paid by Western Union to Grace Kennedy for providing the service are subject to VAT”.
“Commissions paid to sub-agents of Grace Kennedy Remittance Services are also subject to VAT.”