Amid a threat by the leading mining organisations to stage a mass protest over new tax measures, the government is aiming to defuse this prospect with the Minister of Finance issuing a lengthy defence of dealings with prospectors and Minister Simona Broomes meeting with miners in the key district of Bartica.
The Guyana Gold and Diamond Miners Association (GGDMA) and the Guyana Women Miners Organisation (GMWO) have written President David Granger seeking an urgent meeting over the coming days and warning that if there isn’t a meeting there would be a slowdown in gold declarations and a mass protest.
In 2010, miners rocked the then PPP/C government by staging mass protests over environmental regulations.
In the last few weeks the miners groups have clashed with the government over the new tax measures and the two sides remain far apart on issues such as the doubling of the tributors tax and the required paperwork for tax payment purposes.
On Saturday, Minister of Finance, Winston Jordan was reported in a Ministry of the Presidency statement as saying that the government had met with members of the mining sector to ensure that there is clarity on tax and reporting regulations. He also noted that the Government has already signed a renewable one-year concessionary agreement for items such as fuel and equipment and that the administration is committed to ensuring that there is a level playing field when it comes to taxation.
The statement said that the Minister made these comments in reply to the threats reported in the press by members of the GGDMA and the GMWO to reduce gold declarations and stage mass protests in defiance of the new tax regulations.
Jordan said that the Government has engaged with miners and will continue to do so and added, “We don’t have any agenda out for any sector. We want to promote these sectors in a responsible and environmentally friendly way. We have said openly that our mission is to reduce taxes but at the same time we are on a mission to ensure that every sector and every individual in this country pay their fair share of taxes. This is not an exercise to target anyone.”
New tax measures that were announced in the 2017 budget include an increase in the Tributors’ Tax from 10 percent to 20 percent and a two percent tax on gross income and would also include a requirement to file income taxes at the end of the year. Certain goods and services will now attract the Value Added Tax (VAT). Miners also have to keep up-to-date records of all their transactions for tax purposes and this has been one of the sore points for the prospectors.
Jordan stated that, “Somebody is pushing an agenda that seeks to rile up miners without trying to explain the issues to them… When we go down this road saying that the Government do not understand the difficulties in mining we are getting into realms that suggest that some sectors should be exempted from paying taxes.”
He said that the Government has never been averse to considering various concessionary measures for the mining industry and demonstrated this shortly after taking office by the signing of an agreement with the GGDMA, granting tax concessions on fuel and a range of equipment and supplies.
Jordan lamented that members of the two mining organisations were reported in the press as saying that the Government has removed the concessions when in actuality the life of the agreement came to an end. He said that when the House was considering the 2017 budget, he met with stakeholders at Parliament Building where they mulled the implementation of a new one-year agreement for this year at the end of which miners will have the option to renew.
Subsequently, a post-budget meeting was also convened in January with the GGDMA, GWMO, small miners and sector Ministers, Raphael Trotman and the minister in Trotman’s ministry Simona Broomes.
“At the end of that meeting we thought we had an understanding and clarifications and on various other issues. I even suggested that we, the Government together with those organisations, issue a joint press release indicating some of the agreements that were reached. The next morning in the newspapers the GGDMA claimed that the meeting was hijacked by small miners and nothing came out of it. This was patently false,” Jordan declared.
The GGDMA and the GMWO had said after the meeting that it was hijacked by certain persons who were not there on behalf of either of the two organisations and who had apparently been invited by the government.
Syndicates
Small miners, Jordan said, were advised to form themselves into syndicates or co-operatives after they complained bitterly that they were not benefitting from any of the concessions that the Government was providing. He said that the Government is of the view that this would be a more efficient way of ensuring that small miners are not bypassed.
It has been suggested in some quarters that the syndicates were an attempt to get past the problems with the miners organisations and undercut support for them.
Jordan added that he is heartened that small miners have been “resisting the instigators but noted that the relevant Government agencies need to go to the miners directly to sensitise them on the new tax measures rather than having intermediaries, who are confusing the miners”.
With regard to objections raised about the filing of income taxes at the end of the year and the hike in the Tributors’ Tax, Jordan said that at the meeting in January, Commissioner General of the Guyana Revenue Authority (GRA), Godfrey Statia explained in detail, the benefits of filing and submitting income tax returns. “Mr. Statia told the gathering there that were the miners to submit their returns. Many of them would be entitled to tax refunds because Tributors’ tax is deducted from your gross income and income tax is deducted from your net income… right now they are not submitting income tax returns and, therefore, they are forced to pay withholding type taxes. They do not get the benefit of the personal allowances that are given to people, who file tax returns,” Jordan explained.
On Saturday, Statia reiterated in the Ministry of the Presidency statement that the new measures will ensure that all tributors from whom taxes are deducted benefit from their respective allowances and they get their refunds, which he said GRA is committed to making available within one month of the returns being filed.
Statia added that contrary to what is being reported in the press, the GGDMA was advised of the new tax measures. “I met with the GGDMA in August when I came on and explained to them, some of the new measures that I would be recommending to the Government and the rationale for recommending them,” he said.
As it relates to the GGDMA’s and the GWMO’s complaints about being burdened with paperwork, Jordan noted that the GRA will be setting up a special section to assist miners as much as possible with paperwork. Miners were given the assurance that even in cases where they do not have TIN certificates they will not be hassled.
Complying
Meanwhile, on Saturday, GINA said that Broomes and Statia met with miners in the Region Seven community of Bartica to address their concerns. During this engagement, GINA said that the small miners committed to complying with the new tax measures but asked for the assurance of lands to mine.
In the 2010 protest against the government, Bartica miners played a key role.
GINA said that Statia explained to the miners at the boardroom of Bartica’s Regional Democratic Council (RDC) office – that the taxes were part of encouraging greater compliance and intended “to put some semblance of order” in the sector.
Statia pointed out that an analysis of available information showed that close to 30 percent of all gold that has been produced has not been sold to the Guyana Gold Board. The introduction of the new tax measures seeks to address this shortfall. “This law is not structured to catch small miners,” Statia assured miners.
Following the explanation by the GRA head, GINA said that miners expressed their confidence in the new system and a willingness to give it a try. “I think until now most of us in this boardroom was suffering from lack of information,” Bartica resident and miner Holbert Knights said in expressing appreciation for the explanation provided on the new tax measures.
Arthur Thorne, a member of the Parika Mora Small Miners Association, said that the new tax measures could protect small miners and labourers against exploitation in the sector. “When you have a good tax system they cannot deny you didn’t work with them. The tax is good for us,” Thorne said in the meeting.
Another miner, Desmond Hamer, thanked the GRA head for making himself available to small miners, GINA added.
However, miners said that there are still challenges that they will face such as registering labourers. Workers in the industry often times do not have the required documents for paying taxes such as identification cards and Tax Identification Numbers (TINs). “How do you suggest we deal with that knowing especially how expedient it is for us to have workers,” Knights questioned, according to GINA.
Statia in reply said that the GRA is looking to provide a TIN to workers who are issued with a privilege from the Guyana Geology and Mines Commission (GGMC). “We’re going to look at the privilege process to ensure that that works and should solve that problem,” Statia said. Miners also grilled the GRA head on how to obtain their compliance documents among other concerns relating to the new tax measures.
“We know that these things take time so I would not be pushing to immediately enforce the laws. By the end of the year we should be getting everything in place,” Statia assured miners, according to GINA.
