Tax evasion widespread in Guyana – Statia

…incentives to be provided for informants

In a bid to crack down on the billions it is losing to tax avoidance and other assorted criminal activities, the Guyana Revenue Authority (GRA) will be using recently passed laws and other legislative avenues to build its intelligence network. It is understood that this includes providing financial incentives to whistle-blowers.
According to GRA Commissioner General Godfrey Statia, this practice is one supported by the law.
“It’s allowed in law. We just have to put things in place and the Minister has to sign off on it, and then we’ll be able to pay them,” he stated recently. Also providing information on this plan was head of GRA’s Custom and Trade Administration, Lancelot Wills.
According to Wills, the Witness Protection and the Protected Disclosures Act are the most relevant laws to the issue. He also noted that the Revenue Protection Act had a role to play in the regulatory framework.

“Owing to the magnitude of (effects) that could follow a disclosure of such nature, it may be treated under either regime. We intend to implement a system of protection of revenue by way of information gathered in accordance with the law,” Wills related.
The Protected Disclosures Bill 2017 was passed on January 18, while the Witness Protection Bill 2017 was passed the next day. In them are provisions for a witness protection programme, administrative centre, and stiff fines for blowing covers. The Revenue Protection Act of 1933 is actually more concise where paying informants is concerned.
According to Part 2 of the Act, “The Minister may authorise the payment from moneys provided by Parliament for the purpose of such rewards to such persons as he may think fit, in order to secure the efficient protection of the revenue and for the prevention, discovery, suppression, and prosecution of offences against the customs and inland revenue laws…and regulations relating to mining and State laws.”
Fraud
At a press conference held last week, Statia had related that the entity had lost 40 per cent of its revenue for last year, or some G$70 billion, through tax evasion. He complained that the situation exists at all levels, and has implications for overall budgetary allocations.
“If we collected G$170 billion last year, 40 per cent is G$70 billion. And if you collect G$70 billion more, I’m sure the Minister of Finance would be able to balance his budget. I’m also sure that all the capital projects we would like to have and see started would be completed. But you have tax evasion at all levels.”
At the level of customs, he noted that there is a lot of under-invoicing. “Or if they don’t do that, they would use incorrect codes. If you could actively collude with the broker, you would see a simple analysis would show that people have been using incorrect descriptions to get past that. We have lost all discipline. Value systems have broken down. And it’s countrywide… we have to face it.”
According to Statia, the entity has been dealing with the problem by utilising its Law Enforcement and Investigation Division, and going after defaulters. In addition, more staff rotation has been employed. Asked about the status of these cases, Statia related that several individuals were presently before the courts.
Vehicle smuggling
There is also the issue of vehicle smuggling. Statia related that over 2000 vehicles have entered Guyana from Suriname but did not return. Purchasing the vehicles and then bringing (them) over with false number plates is a practice designed to cheat the system of duties.
“You found that thousands of vehicles were being imported from Suriname and Brazil and were not going back and (were) using old registration numbers,” Statia related. “You also found that people were abusing the process using fake vehicle numbers, fake diplomatic numbers, and all these things. The other day I saw a DPL 501. Nowhere in the United States Embassy (are there) 501 vehicles.”
Statia affirmed that the Government has not abandoned a project to introduce number plates with special security features, but rather that it was put on the back burner as conflict arose regarding jurisdiction.
According to the Tax Chief, there was some uncertainty as to whether his entity should handle the project or the Ministry of Public Security. He noted, however, that the project should get under way in 2018.