The Guyana Revenue Authority (GRA) takes this opportunity to respond to the letter penned by Mr Michael Carrington, Alliance for Change (AFC) Region 4 Councillor, captioned ‘Restore tax allowance for dependants’ which was published in the October 28, 2009 edition of Stabroek News.
Mr Carrington’s letter is based on the notion that the fixed income tax threshold which currently exists, does not cater for allowances for families. This premise is misguided on two accounts.
Firstly, the income tax threshold encapsulates and accounts for all allowances that were granted under the previous system. The basic expenses of a family were considered and catered for when the fixed income tax threshold was introduced to replace the previous system.
Secondly, the government’s policy has always been and continues to be the alleviation of hardship faced by citizens through periodic revisions of the income tax ceiling. In 2009, the threshold increased by 25% of its previous level. Between the years 2006 and 2009, there was a 75% increase in the income tax ceiling, which is represented by a movement from $20,000 to $35,000 per month. Likewise, there has been a cumulative increase of 250% in the income tax ceiling from 1995 to the present.
These changes over the years represent government’s continued commitment to alleviate economic hardship encountered by citizens, due to increases in the cost of living. In each instance, these measures have resulted in increases in taxpayers’ disposable income and spending power, while the government loses billions of dollars in revenue.
In addition to these measures, assistance programmes are implemented by relevant government ministries, which seek to provide support and assistance to families in various ways, including the supply of school uniforms for children.
The GRA is mandated to administer the various tax statutes on behalf of the Government of Guyana.
In this regard, the GRA has an obligation to implement appropriate administrative, compliance and enforcement measures to collect and protect the government’s revenue, and to ensure that policies are in place to strengthen tax administration and increase revenue collection.
While it is of the utmost importance for the government to adequately cater for the welfare of citizens by granting taxpayers generous tax relief, the tax statutes must be designed to generate adequate revenues for the government to finance and pay for the services provided to the citizens of Guyana, as well as to attain the fiscal sustainability required for long-term economic growth.
Yours faithfully,
Khurshid Sattaur
Commissioner-General
Guyana Revenue Authority
