Dear Editor,
It is quite heartening to know that members of the taxpaying public are seeking answers to numerous tax related matters, especially those that impact their livelihoods.
As the agency that is mandated to promote voluntary compliance with Guyana’s tax laws, the Guyana Revenue Authority (GRA) is always willing to provide answers to questions asked by our taxpayers. More particularly during this busy tax period we continue to encourage persons to ask questions.
In this regard, reference is made to a letter that appeared in the Friday April 3, 2015 edition of the Stabroek News captioned ‘Why is meal allowance being taxed?’ in which the unnamed writer indicated that as a security officer he/she was surprised to learn that their meal allowance is being taxed.
For the benefit of all taxpayers, meal costs are generally considered to be of a private or domestic nature, since these are a normal part of living. Thus, if an employer pays employees a meal allowance for them to buy their lunch in the course of their normal working day, the allowance is generally considered taxable to the employee.
Generally, meal allowances are provided to employees who carry out work during the hours designated for lunch or recess. Employees in the public sector are given a subsistence allowance for working short periods away from their base, and as a consequence have to incur expenditure for “lodging and meals.”
However, as it relates to private sector employees, consideration may be given to treat subsistence or a meal allowance as non-taxable, if an employer in the private sector pays subsistence or a meal allowance to employees, provided the allowance was used to the satisfaction of the Commissioner-General for its intended purposes.
Both employers and employees should be aware of provisions under the Income Tax Act of Guyana Chapter 81:01 which makes provision for allowances subject to Income Tax and allowances exempt from the tax.
Under the said Act, all allowances are subject to Income Tax with the exception of leave passage, travelling, entertainment, station and subsistence allowances, medical discharge and dental expenses, once it is proven to the satisfaction of the Commissioner-General that these allowances were used for the intended purpose.
Yours faithfully,
Khurshid Sattaur
Commissioner General
Guyana Revenue Authority
