While the Guyana Revenue Authority (GRA) is taking steps to implement the recently approved and gazetted mortgage interest relief for first time home builders and owners, not all of the commercial banking institutions have put the necessary measures in place, according to Commissioner General of the GRA Khurshid Sattaur.
Under the newly introduced relief, first-time home owners who are holders of mortgage loans of up to $30 million from a commercial bank or the building society will be permitted to deduct the interest they pay on such mortgages from their taxable income for the purpose of personal income tax.
However, Sattaur said that the implementation of the measures is taking longer than anticipated since the banks are not working as fast as he believes is warranted.
“We are not getting the cooperation from the commercial banks,” said Sattaur in a recent comment to this newspaper. “We have done everything we need to do but we are now waiting on the banks to do their part,” he said.
According to Sattaur, some of the banks are complaining that it would take time to put the systems in place to facilitate the measures. He said however that some of those institutions have started to advertise the services.
Speaking to Stabroek News recently, Minister of Finance Dr Ashni Singh said he was not aware of reports of teething problems with the implementation of the relief.
“After I announced it in the budget legislation and regulations were required to be issued. I have since issued those regulations… they have been gazetted,” he said.
“I have also said to the GRA that they should move to implement those regulations as quickly as possible. I know that they are working with the banks,” he said. “I have seen that some banks have actually been advertising. There are some forms that have to be filled out… you apply for the relief and once you are deemed eligible then the release is granted. I think you take a certificate to the bank and the bank makes an adjustment to your mortgage payment,” he said.
“I am not aware that there are teething problems,” said Minister Singh.
On October 8, 2013, the minister signed the Mort-gage Interest Relief (MIR) Regulations, announced as a measure in the national budget of 2013. It means that the portion of taxable income used by a first-time home owner to pay interest on a housing loan of up to $30 million from a commercial bank or building society will be exempt from personal income tax.
The Commissioner General of the Guyana Revenue Authority (GRA) however reserves the right to withdraw his approval of mortgage interest relief and assess the taxpayer for the relief granted to the date of withdrawal where construction is not commenced and materially advanced within 18 months of the granting of approval.
The Government Infor-mation Agency (GINA) had reported that the introduction of the MIR will cost the government approximately $580 million annually, and will benefit tens of thousands of first time low and middle income home owners.
