CHANGES TO LOOK OUT FOR IN THE TAX SYSTEM FOR 2017

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CHANGES TO LOOK OUT FOR IN THE TAX SYSTEM FOR 2017

Guyana’s tax system is poised to undergo some rapid and drastic changes for the New Year. And whether you’re a vendor, doctor, school teacher or successful entrepreneur, there are a few that you must be mindful of. These changes were announced by Finance Minister, Winston Jordan during his budget 2017 speech which was delivered to the nation on November 28, last. Here is a look at some of those tax measures. • If you are looking for an area to invest some cash this year, in hopes for a quick turn over, then one highly profitable area would be equipment for alternative energy. Guyana is on the verge of “greening” its economy and to support this, the Government is granting tax exemptions on the importation of items for wind and solar energy investments. In addition to this, it will also be paving the way for a one-off tax holiday of two years for corporation tax for companies involved exclusively in such importation. • The Government is resolute about clamping down on the importation of used tyres for motor cars, vans,
pickups, SUV’s, and mini-buses. As such, it will be restricted from entering Guyana, with effect from April 1, 2017. According to the new rules and regulations, the aforementioned vehicles described, which are imported into Guyana after April 1, 2017, will be required to be fitted with new tyres (including the spare). According to Finance Minister, Winston Jordan, a “phase out” period for existing stocks of used tyres will be allowed. Also, used tyres that have been ordered and shipped will be allowed a period of three months to have these orders completed. • In an effort to improve its revenue collection methods within the Guyana Revenue Authority (GRA), Government will now impose an increased penalty for the late payment of taxes. According to the Finance Minister, the penalty for late payment of tax provided for under section 99 (1) of the Income Tax Act Chapter 81:01 will be repealed and a simplified interest regime enacted. He said that Section 6 (1) (c) of the Financial Administration and Audit Act will be amended to facilitate the imposition of interest on late payment of tax at the rate of 2 percent per annum (similar to VAT). • For businesses, the Government from January 1, 2017 will also impose a penalty for the late or untimely presentation of books to GRA. In this regard, Jordan said that audits are greatly affected by the lack of evidence
to justify disclosures in financial statements. He proposed to increase the fine to $200,000 and/or six months imprisonment. • Garnishment will also be a new feature in 2017. It is considered to be a rather extreme measure for collecting a debt. According to the Finance Minister, the provisions of section 102 of the Income Tax Act Chapter 81:01 will be revised to provide authority to the GRA to garnish funds from bank accounts held by taxpayers who have outstanding tax arrears. He said that this provision would assist to improve compliance with demands issued by the GRA for outstanding payments. • Government also wants to remove the practice by some businesses which fail to inform the GRA about the commencement of its operations. The Finance Minister said that many businesses are non-compliant with the law regarding filing of returns, especially at the early stages. As such, he said that the law will be amended to give persons a maximum of three months from the commencement date of business to inform the GRA. • According to the Finance Minister, there are currently no fees for the issuance of TIN certificates, even though GRA incurs an administrative cost. For 2017, a fee of $1,000 for the first TIN certificate and $5,000 for reprinting of TIN certificates will be imposed.

Article Categories:
Consumer Tips · Investments · Issue 26

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