Dear Editor,
In regards to the Rudisa issue, I tried refraining myself from becoming involved even after the Commissioner General (CG) of the GRA had made some thoughtless comments back in May of 2014 on this matter. Now Mr Nadir has become an advocate of boycotting the company’s products and there are ads in the newspapers calling for the same based on Mr Nadir’s position.
In my opinion, this issue has different elements relating to legal, accounting and tax issues that have to be looked at separately. Both the CG and Mr Nadir have been guilty of comingling them to arrive at some rather emotional solutions.
Firstly, the Caribbean Court of Justice (CCJ) had ruled that the money should be paid to the company and Mr Nadir has agreed that countries that have signed on to the CCJ have to abide by its rulings. Therefore, I am quite surprised that Mr Nadir, being a former Minister of Trade and Tourism is so casually calling for the government not to pay, and for consumers to boycott the company’s products. These are quite irresponsible statements coming from the former leader of The United Force, a party that supported investments and a free market economy.
Secondly, the CCJ had stated that Guyana would not have had to repay the tax if there was evidence to show that it was passed on to the consumer or a third party. No such evidence was provided. Also, the court concluded that the documentary evidence, as well as the testimony of the claimants’ witnesses demonstrated that the tax was absorbed by the company to maintain its competitive edge in the Guyana market.
So what is Mr Nadir missing? The CCJ’s decision was based on facts and evidence. Also, Guyana was represented by former AG Anil Nandlall. The company would have produced its audited financial statements to support its arguments. Yet, Mr Nadir is asking the “the court of public opinion” to make up its own mind while stating that that anyone in business would know that Rudisa/CIDI had to pass the tax on. I think most people in business will not agree with that position.
Finally, the tax issues. The CCJ strictly dealt with the environmental tax. It did not cover corporation tax and VAT. Mr Nadir has erroneously mixed the effect of these different taxes to support his conclusion.
Maybe, we should look at what the former CG, Mr Sattaur was reported to have said about this matter, and to ask what action was or was not taken before to address some of the tax concerns raised by Mr Nadir. In May 12, 2014, one of the newspapers carried an article with the heading ‘Absolutely no funds in our estimate to provide for this payment -Tax Chief.’ In my opinion, in this article, Mr Sattaur was reported as making some rather unprofessional remarks unworthy of his high office. Was he reprimanded by his Minister or the Board? I doubt it.
In the article Mr Sattaur reportedly said, “another way of looking at it too is, suppose the company argues that it reduced its profit margin by having to absorb the tax to stay competitive. Then this refund of the tax will be tantamount to an earnings of profit and I will have to re-examine its corporate tax liability and probably its VAT liability as the spinoff issues pertaining to the payment of the refund.”
Mr Nadir is asking for the government to take certain tax action. Mr Sattaur had reportedly undertaken since May of 2014 to re-examine the company’s corporate tax and VAT liabilities. Note that he used the word re-examine.
So what has the GRA done? It should be confidential. I have always maintained that tax compliance is not strengthened by noise-making and wild statements, but by professional people who understand tax and accounting principles and concepts and who have respect for the law, taxpayers’ rights and the confidentiality of taxpayers’ information.
Somebody should be apologizing soon to Rudisa/CIDI.
Yours faithfully,
Dhanraj Deonarine
Canada
