Having the ability to request personal banking information from institutions will afford the Guyana Revenue Authority (GRA) the opportunity to reconcile information provided by taxpayers.
This is according to Chairman of the GRA Board Rawle Lucas. In a recent interview with Stabroek News, Lucas explained that the legislation is “not intended to be malicious” rather it is “intended to put the GRA in a position where it can corroborate the information the taxpayer presents.”
The exploratory memorandum for the Financial Institutions (Amendment) Bill 2015 recently tabled in Parliament, notes that the bill seeks to amend Section 63 of the Financial Institutions Act to permit disclosure of customer information by a financial institution to the GRA, where a law so requires or where the revenue authority makes a lawful request or demand for the information.
The bill has raised concerns that the information could be used for purposes other than reconciling.
According to Lucas, GRA already has the authority to demand from any taxpayer any information including banking information.
“Even as it is right now, the GRA actually could demand to see your bank account today,” he noted. “The issue is whether or not the information you have provided is complete information and the only way GRA can determine [that] is if they reconcile it with what the bank has. This is the best way to check.”
He further explained that most transactions in Guyana especially in the smaller and personal sector are done by cash.
“Someone with a bank account might not have a checking account to transact business so it becomes necessary to access personal savings in order to aggregate information about the taxpayer’s income,” Lucas said
He stressed that the taxpayer has an opportunity to provide GRA with the information.
“The law requires that you keep financial data for 8 years and GRA can request data as far back as 7 years. Unless they find irregular activity then that limitation is removed and they can go back as far as they need to,” Lucas explained.
If, however, the audit department at any point needs to reconcile taxpayer data they may make the request of the banking institutions.
When questioned about concerns that the information might be misused, Lucas admitted that he “can’t say with any certainty that no one will misuse the information.”
He noted that while every GRA staff member is required to take an oath of confidentiality, humans are fallible.
Compensation
Lucas also explained that the board will in some cases support GRA in accepting compensation in lieu of prosecution.
Lucas explained that in some instances the cases might be so simple that it might be better to have a resolution outside of the court system than trying to go through the court, it “doesn’t make sense to take a sledgehammer to crack a nut.”
He noted that the court system can be lengthy and costly. “If we are looking to reach a conclusion as quickly as possible in which the government gets maximum revenue then a negotiated settlement might be best,” Lucas said. He added, “If there are sticky cases in which a negotiated settlement is not possible those cases will go through the court.”
He explained that litigation will especially be pursued if there are cases where it is necessary to establish the policy or legal interpretation of a situation.
“We have to be flexible and we have to be practical. We have to ensure that we have the best outcome for GRA and the government. It is taxpayers’ money we will be using in any event to defend or prosecute the case, we don’t want to be unduly wasting taxpayers’ money.
Some of these cases may also become stuck in the court so it makes more sense to settle,” Lucas explained.
The question was raised in the context of several high-profile settlements that the GRA had pursued over tax evasion.
