-admits defaulting on workers PAYE, NIS
By Cathy Richards
“I can’t speak for other municipalities but I can speak for Linden, we are doing very well in terms of managing the Town Council given the meagre financial resources available to us,” Interim Management Chairman (IMC) Orin Gordon said following allegations that it defaulted in remitting workers’ PAYE and NIS contributions to the related agencies.
Workers had also accused the Mayor and Town Council (M&TC) of not paying them retroactive money owed to them over a number of years, in addition to not remitting the said dues. This accusation was levelled at a recent meeting with President Bharrat Jagdeo.
Gordon, in an exclusive interview with Stabroek News, sought to defend the Council’s positions and actions. He explained that whenever the annual budget is read the Ministry of Finance would write the Council informing it of increases on minimum wages but it does not compel the Council to pay the increase.
“Despite these announcements it is up to the Council to decide whether or not we could make these increases. We were never in any position to make any increase,” he added. Earlier this year workers were brought in line with the minimum wage. “We bite the bullet when we decided to bring workers up to the minimum wage which required us getting six to seven million dollars more,” he said.
The IMC Chairman said the Council operates with a stagnant revenue base and has been seeking the government’s approval for an increase of rates and taxes by no more than 50%. This, he said, would put the Council in a better position to satisfy its management and salary needs. However, Minister of Local Government Kellawan Lall did not support this move; he instead suggested that the Council valuate properties under its purview.
The M&TC currently generates about $18 million annually from rates and taxes as the average person pays no less than $3000 and the above average pays between $6,000 and $7,000 annually. The Council also has an annual budget of about $45 million for salaries.
In the light of this, the IMC viewed Lall’s recommendation as unfair since the Council would be required to pay the valuer a percentage for every property valued. “We had made several other recommendations none of which we got any positive response on,” Gordon said. The Linden IMC/M&TC had in the past, recommended that systems be put in place to have communities that do not fall under its tax roll pay a sum of no more than $5,000 across the board for rates and taxes. These areas include Amelia’s Ward, Block 22, Blue Berry Hill and One Mile extensions among others.
It is estimated that there are more than 4,000 houses in these communities and the Linden municipality would be better able to pay salaries and boost its services to these areas if they were able to collect revenue from them. “We have been stretching ourselves thin to provide services to these communities despite the fact that they are not paying rate and taxes to us they are a part of the town and they benefit from the services of the town council and at the same time they are not paying anything and realistically this is unfair,” Gordon said. He also said that services to the communities had decreased over the past few months due to malfunctioning equipment.
Traditional
Other recommendations had also been tabled in the past to ease the pressure on M&TC workers. Stabroek News understands that following a government increase in 2008 or 2009 the Linden IMC had approached the oversight ministry for a $4,000 across-the-board increase for workers whose salaries were below $50,000 per month but was told that those workers were not considered traditional public servants and as such the increase could not have been given to them. It had also recommended that areas including Amelia’s Ward be put on the Council’s tax roll.
Further, the Urban Development Programme had a component which did extensive work on developing tax rolls for municipalities including the Linden municipality, but the Council was never furnished with this document which would have better informed it to deal with rates and tax issues. Gordon said the Council had approached the Ministry of Local Government for the said documents but was told that the computers had been sent to the finance ministry and the document could not be found. He said too he has made several efforts to meet with the current Minister of Local Government to discuss possible ways of moving the Council forward to no avail.
“Since this Minister took office he has never visited us as the Linden Municipality in the four years he has been there. We have been writing and writing but all to no avail,” he said, adding that the Council was only able to secure an audience with the minister once concerning another issue, and it was due to the intervention of Opposition Leader Robert Corbin. “With (former Local Government Minister (Clinton) Collymore it was very different,” he said, adding that “we fought a lot but we got to common grounds.”
The M&TC also admitted that it has been defaulting in remitting its workers’ Pay-as-You-Earn (PAYE) to the Guyana Revenue Authority (GRA) and National Insurance Scheme (NIS) contributions but said that this was due to the lack of finances. Stabroek News understands that the Council has entered into an arrangement with the NIS which would allow them to pay these sums for the existing month and $50,000 on their arrears. At the time of this interview the town clerk was unable to say exactly how much was owed to the NIS. However, he said the Council is currently in negotiations with the GRA on the issue of the PAYE owed and it hopes that a similar arrangement could be put in place.
The NIS had in the past taken the Linden municipality to court for defaulting on their payments and a judge had ruled in its favour. As at 2003 the municipality owed the GRA $2.8 million and up to press time the finance department was busy calculating the sum that it would need to pay if workers were to be given the 2006 increases. The IMC Chairman posited that the only way to deal with the situation would be to cut the number of staff or have those communities that are off their tax roll incorporated or increase rates and taxes on existing property by 50%.
“As it is the Council don’t need this large numbers of staff. Currently it is between 130 and 140 and we could work comfortably with about 60 persons and some services could be contracted out. This way, persons could be paid a good salary and the service to the community could be much improved,” Gordon said. “They are tying our feet and hands at the same time, the government need to either release our feet or hand so we can do something positive to rest this prolonged situation,” he added. The Council is currently advertising for persons to join its constabulary department. It ahs also declared amnesty on rates and taxes for two months from May 18.
