VAT collection up by 5%
Georgetown, GINA, August 16, 2016
The collection of Value Added Tax (VAT) for the first half of 2016 exceeded that of the corresponding period in 2015 by five percent. However, there was a marked decline on VAT on imports.
According to the mid-year report, on the performance of Guyana’s economy, presented by Minister of Finance Winston Jordan, $17.3B was collected in 2016 compared to $16.4B for the corresponding period in 2015.
Despite the increased collection of VAT overall, there has been a noticeable reduction on the amount of VAT collected on imports. Collection in this category declined by $1.4B, while VAT collected on domestic supplies, increased by $436.4M.
While the decline in VAT collected on imports has been attributed to a fall in imports by the wholesale and retail sectors, newly appointed Commissioner of the Guyana Revenue Authority (GRA), Godfrey Statia said other contributing factors include “a lot of exemptions (VAT) inherited from the previous administration, and secondly there are a lot of leakages at the import level.”
Increased collection on VAT on domestic supplies has been credited to the raking in of almost $125M in VAT arrears and $74.7M from the local manufacturing and services sectors.
The GRA Commissioner said efforts will be made to prevent identified shortcomings and ensure compliance at all levels.
“We would have to shift our resources to reduce that, and the third thing is that at the domestic level, we have to also shift our resources into the enforcement mode so that we could go behind the businesses for them to comply, so we are looking more at enforcement, compliance and investigations and further examinations so as to increase VAT collection.” Statia was at the time speaking to media operatives at the press conference hosted by Minister of Finance Winston Jordan, to discuss the country’s mid-year economic report.
Statia also stated that as at mid-2016 the tax agency had paid more than $2B in VAT refunds. “VAT returns were not paid timely since 2013. It has been inherited and we are trying to bring the system up to date,” the commissioner explained.
Minister Jordan had earlier informed media operatives that a team from the International Monetary Fund (IMF) has been invited and is likely to arrive this month, to assess the possibilities of reducing the rate of the taxes.