Dear Editor,
Mr Christopher Ram’s acerbic comments in his letter captioned ‘Mr Khan’s letter ignores Section 13 of the Income Tax Act, exempting only the President’s official emoluments from Income tax’ (SN, Feb 20) does him no good.
Mr Ram is obviously upset at my recent comments on matters in the area of revenue law, which he describes as forays into revenue law. As far as I am aware, this area of the law is not the reserved domain or province of any single individual, whether that person is an accountant, lawyer or both, and displays of temper directed at a colleague for showing an interest in this area, speak volumes.
Mr Ram points out that Section 13 (a) of the Cap 81:01, Income Tax Act specifically deals with the exemptions of the emoluments received by the President. What Mr Ram fails to add is that even after the passing of Section 13 of Cap 81:01, into law, Section 66 of Cap 80:01, Tax Act, remains on the books. He cannot wish away this fact or magically wipe it off, make it dormant, inoperable or ineffective. He must agree that if the lawmakers intended to remove the tax exemptions afforded the President of Guyana, all they had to do was repeal Section 66 of Cap 80:01. As far as I am aware this was never done.
Mr Ram’s long excursion into history undermines his own arguments, as all the amendments and various tax acts that have been passed never sought to repeal section 66 of Cap 80:01. My argument is that the existence of Section 66 of Cap 80:01 allows any president, including our current President, to claim exemption on taxes including capital gains tax, even where an obvious gain has made, such as in Pradoville 1.
Mr Ram refers to badges of trade and cases in revenue law to support his claim that it may be inferred under one of the guidelines of badges of trade, ‘motive of the realization,’ that the sale of the Pradoville 1 property, qualifies as a trade transaction and therefore is subject to capital gains tax. While it is true that a one-off transaction is capable of being treated as a trading transaction, IRC v Fraser (whisky case) 1942, and Rutledge v CIR (toilet paper case) 1929, in Marston v Morton (1986), the profit from a single transaction in land was held to be a capital receipt rather arising from trade. In any event there is the matter of Section 66 of Cap 80:01, which offers the President tax exemption.
I am not aware of any other transaction other than Pradoville 1 involving President Jagdeo as a sitting president. If there are others then it raises other serious questions to which Mr Ram has alluded, including an abuse of Section 66 of Cap 80:01, and its use, as an instrument to avoid the paying of taxes.
Where I agree with Mr Ram is that it may be opportune and timely to have all persons seeking political office to agree to place their business interest in a blind trust and to abstain from business deals while in office. In this regard I am fully supportive of Mr Ramon Gaskin’s letter ‘The executive presidency lays the foundation for arbitrariness in public office’ (SN, Feb 23).
Yours faithfully,
Jerome Khan
