Guyana’s sweet concession packages can be accessed by both foreign and domestic companies.
These incentive packages for investments opportunities are divided into several sectors designed to suit the unique nature of the relevant sectors.
However, it is important to note that tax holidays are not automatic and investors must satisfy internal agency guidelines and rules before benefiting from any form of tax benefit.
Once the investor has prepared and submitted a proposal, Guyana’s new and improved Office for Investment, otherwise known as Go-invest, issues a letter or sometimes a Memorandum Of Understanding (MOU) setting out the known tax incentive regimes that are applicable to the type of investment.
Go-Invest’s recommendations on tax incentives are usually based on the level of the investment expected in the project, the level of employment to be created by the investment, the financial capability of the investor and the viability of the investor’s proposal.
Where the conditions precedents set out in the letter/MOU are satisfied by both the Government and the Investor, an Investment Agreement (IA) is prepared with recommendations of tax incentives by Go-Invest and sent to the INVESTORS and GO-INVEST Proposal is discussed.
Meetings are set up with relevant state agencies and if the Investor chooses to continue, Go-Invest issues a letter setting out incentives and confirming general terms of the investment. Further talks lead to an MOU.
State Agencies take over with requisite applications etc. Investment Agreement (IA) containing incentives, is drafted and forwarded to Guyana’s Revenue Authority (GRA) for review.
Once the I.A. is in order, it is executed by the Ministry of Finance and Investor July 2008 Fiscal Incentives framework for Investment 14 Guyana Revenue Authority for vetting and finalization.
An Investment Agreement also lists the machinery, equipment and other items that are usually exempted from Custom duties. The listing of these items in finite detail is paramount to the issue of transparency, and acts as a check and balance in the system to prevent abuse of Investment Agreements.
It also provides the GRA with the ability to properly monitor and administer its functions as it relates to tax- and non-tax payers alike. Listing items eligible for exemptions allows the GRA to compute the value of exemptions granted for which it must account to the public for by publication.
The GRA then reviews the draft Investment Agreement using pre-existing customs, policy guidelines and the law to determine the incentives applicable to a project. It sometimes proceeds to call the Investor in to negotiate the terms of the Investment Agreement. Once GRA is satisfied with the Investment Agreement, it is sent to the Minister of Finance with a recommendation for signature.
Below are some of the general and special concession packages and what they offer.
General Incentives
Exemption from Customs Duty on most plant machinery and equipment
Exemption from Customs Duty on raw materials and packaging materials used in the production of goods by manufacturers
Exemption from Customs Duty and zero rate of Value-Added-Tax on raw materials and packaging for manufactures who export 50 percent or more of their products
Unlimited carryover of losses from previous years
Accelerated depreciation on plant and machinery for approved activities
Full and unrestricted repatriation of capital, profits and dividends
Benefits of double taxation treaties with the United Kingdom , Canada, Kuwait and Caricom countries
Exemption from Customs Duty and zero rate of Value-Added-Tax on items approved under an Investment Agreement between the Government and the business
Exemption from Excise Tax on items approved under an Investment Agreement between the Zero rate of Value-Added-Tax on exports
Tax holidays for projects that meet the requirements specified in the In-Aid of Industry Act.
SPECIAL INCENTIVES (PROVIDED IN ADDITION TO GENERAL INCENTIVES)
Government provides export allowances for non-traditional exports to markets outside Caricom. The actual amount deducted depends on the proportion of export sales to total sales. It does not include rice, lumber, timber, shrimp, rum, sugar, diamond, gold, bauxite, molasses, petroleum.
% of export sales to total sales
10% or more –less than 21%
Greater than 21% – less than 31%
Greater than 31% – less than 41%
Greater than 41% – less than 51%
Greater than 51% – less than 61%
Greater than 61%
% of export profit deducible from income tax
25%
35%
45%
55%
65%
75%
Agri-business
• Exemption from Customs Duty on a wide range of machinery and equipment for land preparation, cultivation, harvesting – tractors, combines, bulldozers, excavators, etc.
• Exemption from Customs Duty on a wide range of agro-processing equipment – sorting and grading of seeds, fruits presses and crushers
• Zero rate of Value-Added-Tax on harrows, scarifiers, ploughs, weeders, hoes
• Exemption from Customs Duty on fertilizers, insecticides, fungicides, weedicide, herbicides, inoculants
• Zero rate of Value-Added-Tax on fungicide, herbicide, weedicide, pesticides, fertilizers
• Exemptions from duties and taxes from items covered under an Investment Agreement
Manufacturing
• Exemption from Customs Duty on a wide range of process machinery and equipment including packaging equipment – fruit processing, sewing machines, four processing, poultry feed
• Exemption from Customs Duty on a wide range of auxiliary equipment – boilers, fork-lifts, scales for continuous weighing, conveyors
• Exemption from Customs Duty and zero rate of Value-Added-Tax on raw materials and packaging form manufacturers who export 50 percent or more of their products
• Exemption from Customs Duty on raw materials and packaging materials used in the production of goods by manufacturers
• Zero rate of Value-Added-Tax on sacks and bags used for packaging of goods
• Exemptions from duties and taxes from items covered under an Investment Agreement
Tourism
• For tourist hotels and eco-tourist hotel
• Tourist hotels – a hotel having at least 15 rooms and providing accommodation, services and activities intended to attract visitor on holiday
• Eco-tourist hotel – a tourist hotel in a location and having activities intended to attract persons who have an interest in the natural environment and wildlife of Guyana and having installations and operations designed to protect and preserve the natural environment and wildlife
• New tourist hotels/eco-tourist hotel – exemption from Customs Duty and zero rate of Value-Added-Tax on equipment, furnishings, building materials, appliances – to a total value of up to 50% of the total investment
• Expansions of existing tourist hotels/eco-tourist hotels – fiscal concessions of up to 25% of the additional investment
Fisheries
• Established fishing industries with fishing licences are eligible for exemption from Customs Duty for items such as spares, packaging material, fishing nets, floats, fishing vessels and wide range of fishing equipment
• Small fishing establishments that provide evidence of their operations and supporting documentation from the Fishing Co-operatives are eligible for exemptions from Customs Duty and zero rate of Value-Added-tax on fishing nets, floats, rope, twine, cordage, hooks and sheet lead
• Exemption from Customs Duty and Value-Added Tax on outboard engines of up to 75 Hp
• Exemptions from duties and taxes for items covered under an Investment Agreement
Forestry
• Exemption from Customs Duty of a wide range of forestry and sawmilling equipment – skidders, band saws, gang saws, chain saws, saws blades, etc.
• Exemption from Customs Duty on a wide range of wood working equipment – lathes, sanders, routes, saws
• Exemptions from duties and taxes for items covered under an Investment Agreement
Mining
• Exemption from Customs Duty on a wide range of mining equipment – for sorting, screening, separating, washing, crushing, grinding, mixing or kneading earth, stone, ores or other mineral substances; rock drilling or earth boring tools; furnaces and ovens for roasting, melting or heat treatment of ores, pyrites or of metals
• Exemptions from duties and taxes for items covered under an Investment Agreement
ICT
• Exemption from Customs Duty on a wide range of ICT equipment including computers and their hardware accessories, integrated circuits, micro assemblies and apparatus
• Zero rate of Value-Added-Tax on Computers and hardware accessories, routers, switches and hubs for networking computers, toner cartridges and ink cartridges for computer printers
• Tax Holiday
• Exemption from duties and taxes for items covered under an Investment Agreement
