RE: Nigel Hinds Letter “GUYANESE RELEGATED TO DRIVE OLD VEHICLES”
Georgetown, Wednesday, October 3, 2018: The Guyana Revenue Authority (GRA) wishes to respond to the inaccuracies contained in a letter appearing in the September 30, 2018 edition of the Kaieteur News paper titled ‘Guyanese relegated to drive old vehicles’ from the writer, Nigel Hinds, and finds it necessary to provide some clarifications.
It is clear that the writer is not ‘au fait’ with the changes in legislation. In the 2016 Budget, excise taxes on vehicles less than 4 years old not exceeding 1500 cc was zero rated, while those in the 1500 to 2000 cc category was reduced from 30% to 10%. This saw a reduction of total taxes by 33.06% and 16.53% for the 1500 cc and 2000 cc categories respectively (see below). This category accounts for approximately 90% of the vehicle imports in Guyana.
|Vehicles less than 4 years old||Duty||Excise||Excise Reduced in 2016 Budget||VAT||Cumulated total||Revised Cumulative Total||Difference|
|Up to 1500 cc||45%||10%||0%||14%||81.83%||65.30%||-16.53%|
|>1500 cc up to 2000 cc||45%||30%||10%||14%||114.89%||81.83%||-33.06%|
Motor vehicles similar to Allion, Honda Accord, Camry, etc referenced in the letter usually fall in these two (2) categories, paying taxes as follows.
|Categories||Year||CIF US$||Actual Total Taxes (G$)||Taxes stated in Letter||Taxes Overstated by %|
|Premio or Allion 1500 cc||2014||$7,500||$1,021,128||$3,078,000||201%|
|Mazda Skyactive 2000cc||2014||$7,500||$1,279,616||$3,385,800||165%|
From the above tables, it can be seen that the writer has not kept up to date with current reform, thereby utilising incorrect values and rates resulting in overstating taxes by 201% and 165% for these two categories.
Mr. Hinds’ reference to a buyer importing a 3000 cc as an “economy class vehicle” is flawed, as this category is considered “high-end” vehicles. In fact, manufacturers now use the latest advances in technology to produce vehicles with lower cylinder capacities to consume less power while increasing torque, and leading vehicle manufacturers now promote the use of eco-friendly vehicles such as electric, hybrid, and LPG vehicles. Recognising this, and from the perspective of creating a ‘Green Economy” the Government has exempted these categories from the payment of excise taxes notwithstanding the negative revenue impact.
Mr. Hinds opined that many illegal schemes are used to avoid the tariffs. Even registration of ‘written off’ vehicles are being recycled with smuggled vehicles from Suriname. The GRA agrees that such schemes are not only used to avoid vehicle tariffs but are utilized in every facet of tax evasion by unscrupulous taxpayers, who are many times aided and abetted by tax professionals and Customs brokers. GRA with its limited capacity is sometimes overwhelmed by such evasion and whenever caught, confidentiality rules do not permit the publication of “shame on you” lists of the evader and their abettors. It is clear however that the writer may be in receipt of information that will help to minimise this activity and the GRA will be grateful for him to so supply same under its current whistleblower policy.
Lastly, the writer states the “Guyana vehicle tariff regime is antiquated, archaic, and visionless that has resulted in restrictive and oppressive and irrational vehicle import tax rates”. This is far from the truth, as Guyana is poised to take the lead in the region and soon implement the most modern version of the Harmonized System 2017 version of the Common External Tariff (CET). This legislation is in keeping with obligations to the World Customs Organization, and seeks to include provisions for new commodities, technological progress, changes in trade patterns, clarification of texts, environmental issues, simplification and consistency.
The GRA remains firm in its commitment to achieve its objectives. It is willing to advise concerned parties not only on the correct interpretation and application of the laws as it relates to imports, but for every tax that the Authority administers. The Authority therefore calls on every citizen to do their part and join the whistleblowing scheme being administered by the Authority. This will allow for the payment of the rightful tax by persons with the ability and the earned taxable income to pay, thereby allowing for an expansion of the tax base which will result in a reduction in rates and in the incidence of tax for all taxpayers.