Guyana Stores ordered to pay over G$3B in outstanding Corporation Tax

…after CCJ rules in favour of GRA

The Guyana Stores Limited (GSL) has lost its appeal in a matter involving the payment of corporation tax to the Guyana Revenue Authority, which it had taken before the Caribbean Court of Justice (CCJ) to determine whether a two percent minimum corporation tax was unconstitutional and amounted to the taking away of private property.

On Monday, the CCJ dismissed the GSL appeal and awarded cost to the GRA as respondents.
The matter arose in 2012 when the GSL refused to pay more than G$3 billion in corporation tax after a notice of demand was sent to the company. The GSL had moved to the local courts, but both the High Court and the Court of Appeal had ruled against GSL, and ordered that it pay the G$3,807,346,397 in corporation taxes.
The GSL then moved to the CCJ. However, on Monday, the CCJ ruled that the two percent corporation tax was not a forced loan, but the tax was constitutional.
The CCJ stated that the Income Tax Act provides a specialized procedure for challenging assessments, and the GSL should have used that procedure.
The CCJ also held that the 2% minimum corporation tax was not a loan, because the State does not repay the taxpayer, nor does the taxpayer have any right to repayment or redemption, which were crucial elements of any loan.
Under section 10A of the Income Tax Act, the taxpayer simply gets a credit if, and when, the stated conditions are met, and the taxpayer may then apply that credit in reduction of a tax liability, but the taxpayer is never entitled to repayment. The Court also held in its summary that the provisions of the Corporation Tax Act were clear and unambiguous, so that Parliament must be taken to have considered the implication of taxing turnover as distinct from taxing profit, and felt satisfied there was no need to exclude loss years or safeguard the taxpaying company’s capital. The GRA was represented by Atorneys-at-Law Ronald Burch-Smith and Mark Waldron. Guyana Stores Limited is owned primarily by Tony Yassin and Glenn Lall, publisher of the Kaieteur News.
Meanwhile, Guyana Stores Limited still owes the Government hundreds of millions of dollars for the purchased of the building on Water Street, Georgetown.