Entrusting Finance Minister to remit VAT a “recipe for corruption” – Jagdeo

first_img…as Budget 2019 proposes widening Jordan’s powersThe proposed measure of empowering the Finance Minister to use his discretion for granting Value Added Tax (VAT) remittance, as contained in the 2019 Budget, has been described by the parliamentary Opposition as a recipe for corruption.During the final day of the Budget Debates, Opposition Leader Bharrat Jagdeo zeroed in on the measure, which was announced by Finance Minister Winston Jordan during his budget speech over a week ago.The law does allow the Minister to make regulations to remit tax on a personal basis. According to Section 104 of the Income Tax Act, “The Minister may make regulations, subject to negative resolution of the National Assembly, to provide for the remitting wholly or in part of the tax payable by any person or category of persons on such income, in respect of any year of assessment, and in accordance with such conditions as may be specified in the regulations.”In his budget speech, Jordan had invoked Section 105 of the Income Tax Act and proposed amending the VAT Act “to provide for the Minister of Finance to make regulation to remit, in whole or in part, the VAT and the interest on VAT payable by any person, where good cause is shown.”According to Jagdeo, however, this policy has always been deliberately avoided. He noted that under the former Administration, this measure was not employed as they wanted this power to remain with the Guyana Revenue Authority (GRA).And now that the law will be changed to allow persons to approach the Minister directly to request tax remittance, Jagdeo expressed worry for the future of transparency and accountability in Government taxation.When given a chance to rebut the Opposition side and conclude the Budget Debates, Jordan addressed the issue of being allowed to remit VAT. According to the Minister, it is not a power he wants but rather something provided for under the Income Tax Act. As current remissions stand, Jordan announced that there were billions of dollars in increased tax remissions since 2017.“In 2017, remissions were $64.3 billion. In 2018, it (has) gone up to $85.9 billion. It’s not because we became more profligate. It’s Exxon, ramping up for 2020. So that is expected. The laws give them complete duty-free and they have ramped up. You’ve got drill ships, food that is what is causing that,” Jordan stated.Tax collectionWhile the GRA was remitting all this tax, the statistics show that for the year 2017, tax and non-tax collection rose to $194.7 Billion. The 2017 end of year outcome report states that out of this, tax revenues accounted for $171.2 billion.At the heart of this increase in tax revenues, which account for 87.9 per cent of total revenue, is the Government raking in more taxes than ever. For instance, there was a $1 billion or 1.4 per cent rise in the collection of income tax; $600 million or a 3.5 per cent hike in import duty collection and a $300 billion or 0.4 per cent hike in Value Added Tax (VAT) and Excise Tax collection.“Total non-tax revenues were projected at $23.6 billion; actual non tax revenues for 2017 were, therefore, closely in line with the projections at the time of Budget 2018. The Guyana Revenue Authority remitted $49.2 billion,” the report states.According to the report, this is equivalent to 28.8 per cent of tax revenue, compared to figures of $42.3 billion or 27.9 per cent in 2016. It is also $2.2 billion more than the sum at the time of Budget 2018’s presentation.last_img

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