Dear Editor,
The Guyana Revenue Authority (GRA) wishes to respond and set the record straight to an article in the Kaieteur News of Sunday, February 10, 2019, reporting the Honourable Bharrat Jagdeo, Leader of the Opposition titled `Jagdeo accuses GRA of encouraging fuel smuggling’.
Lamenting that the Authority utilises “a slap on the wrist” approach to fuel smuggling, and implying that the GRA is a “creature of this Government,” Mr. Jagdeo was further quoted as saying “Examine the law as it relates to illegal fuel and what the powers of GRA are; you will see how lenient they have been in exercising their powers on the rare occasion that these fuel smugglers get caught.”
As a public officer, I rarely ever respond to political utterances, even when they are glaringly incorrect, or plainly inconsistent with economic theory. How-ever, there is the need to set the record straight in this instance, especially when this statement emanates from one of our leading political thinker and leader. The statement is at least most unfortunate, and irresponsible, and especially so for the fact that as a former Finance Minister with the overall responsibility of the Revenue Authority, a former President, and now Leader of the Opposition, he is fully aware of the vision, mission and the core principles of the Guyana Revenue Authority, and the role of each stakeholder. Matter of fact he presided over the workings of the GRA for the majority of its life in one way or another.
That being said, I would like to make it clear that upon attaining the office of the Commissioner General in 2016, and in numerous conversations with the press, I made it clear that in keeping with the mandate given to me and as a public officer, who is expected to yearly report to the Public Accounts Committee, that I intended to move the GRA to a point whereby it would administer the laws and provide services to the public in a fair and consistent manner. This approach is consistent with my training, and my admonishment to other public officers that I speak to, whereby I sincerely believe that public servants are career individuals and notwithstanding their political persuasions, and the government of the day, and the people that they serve, they are expected to perform their duties fairly, professionally and consistently. This I was taught in the 1970’s and continue to uphold, and hold the staff of the Authority thereto.
This brings me to the subject matter at hand, fuel smuggling. Fuel smuggling is just one of the many areas of revenue loss to the Authority and hence the Country. The very nature of an inherited system of licensing, and exemptions, and the lack of human and physical resources and the cohesion between sister agencies, allow for this activity. Further, this activity like the many other illicit activities that the GRA is called upon to deal with on a daily basis, transcends the political divide.
The GRA has long recognized that smuggling is rampant and that the country loses billions of dollars as a result of this illegal practice. At the level of Customs, under invoicing and over invoicing, misclassification of imports, related party transactions and transfer pricing many times go unnoticed by officers either through collusion, lack of equipment, knowledge and training or downright laziness. Coupled with the societal norm of the belief of having to “give a raise” to get things done, taxpayers continually contribute to this continued state of affairs, which in the majority of cases are needless since the “raise paid” exceed the taxes that would have been payable should the taxpayer “not pay the raise”.
Cognizant of these issues, corrective actions were taken to bolster resources and foster more collaboration with sister agencies to safeguard and protect borders from nefarious activities. Among them, smuggling of contraband, fuel, weapons and illicit drugs, all of which pose economic, health and social threats to the well-being of citizens. From 2016 to present, these activities have allowed for billions of dollars in revenue being recouped from seizures of illegal fuel. In Region 1 alone over $375M was collected from fuel smuggling in 2018, while the Law Enforcement and Investigation Division (LEID) recovered over $600M in duties, taxes and fines, of which $124M was a result of fines, and $119M from sales and auctions from seizures.
Having reinforced its presence at the frontier locations and shifted much of its Revenue Protection and Risk Management focus away from low risk and trusted traders, the Authority has been able to zero in on high risk traders and smugglers. If the collection above is a proverbial slap on the wrist, let the Authority be judged in the eyes of public opinion.
The GRA agrees that Section 205 of the Customs Act Chapter 82:01 enables the Authority to place persons before the courts and shall on summary conviction, make that person so convicted liable to imprisonment for not less than twelve months nor more than three years, with the court having the power to award a shorter sentence for special reasons.
The Authority, however, recognizes that if everyone who breaks the law, either through ignorance, or purposely so, with the intent to defraud the revenue, is taken to court, the entire court system will be clogged. Industry, manufacturing and commerce will be brought to a halt. We live in a society where laws are broken by the very persons who are selected or elected to uphold them, and yet require a higher standard from the humble public servant.
Additionally, the majority of cases taken before the courts were either not timely heard or decisioned, or dismissed for one reason or another. In the meanwhile, the assets languished at the warehouse or ‘at sea” at the GRA’s expense, and unfit for operation thereafter.
From 2017, in light of the numerous cases for which legal action was being considered, the Authority made a considered decision to adopt a more reasonable and consistent approach to breaches in the law, thereby allowing the GRA to broaden its pursuit of more offenders, and allow for certain cases for the offenders who wish to settle their matters in lieu of Court proceedings to pay fines, with the severity of fines being increased with the frequency of these offences, and severe infractions leading to court action. This is in keeping with section 271 of the Customs Act which specifically allows for the following:
“Notwithstanding any other provisions of this Act, the Comptroller may, in any case he deems proper and in substitution for any proceedings in a court of summary jurisdiction, accept on behalf of the State a sum of money by way of compensation from any person reasonably suspected of a contravention of the Act or any regulations made thereunder: provided that such compensation shall be accepted only where the person reasonably suspected of such contravention has expressed his willingness in the form prescribed by the Comptroller that the contravention as aforesaid shall be so dealt with.
The present system of penalties for these breaches to the law are outlined below:
- First Time offenders are required to pay a fine equivalent to one (1) time the Customs Duty and Taxes;
- Second Time offenders are required to pay a fine equivalent to three (3) times the Customs Duties and Taxes;
- Third time offenders are required to pay fines equivalent to three (3) times the value of the goods; and
- In the event, there is a recurrence, legal proceedings are instituted against the respective offender(s).
This system is consistently applied across the board, and I will be the first to admit that in some instances it is abused. However, “the slap on the wrist” implies that there is information out there on some defaulters that the GRA is not privy to. Further to this, the Authority would be most grateful to be so informed of any such information so as to enforce the penal system above. I therefore take this opportunity to again inform the public of our whistle blower policy where the information will be held in strictest confidence.
In closing, I need to reiterate that Revenue Authority takes no political directive in the administration of the tax laws. Though created by the Government through legislation in 2000, to say that it is a “creature” of this Government,” is a misnomer. The Authority has a governing board, and as of July, 2016 to now, I can say with conviction, that no such control has been so exercised by this government.
Yours faithfully,
Godfrey Statia
Commissioner-General
