The GRA today said it will appeal a High Court decision in a case where it had questioned the source of funds for a remigrant’s vehicle.
In a statement, the Guyana Revenue Authority (GRA) said that it had begun questioning the source of funds for remigrants as there appeared to be unscrupulous behaviour where people from overseas were being recruited simply to benefit from the reduction and then just leave the jurisdiction.
The GRA said while it is respectful of and will abide with the ruling of the Chief Justice, it wished to clarify its actions in keeping with the intent of the measures surrounding imports of high-end luxury vehicles by some re-migrants, and the abuse of the concession by some unscrupulous persons who may have been granted such status by the Ministry of Foreign Affairs.
It said that in keeping with policy, remigrants are allowed a vehicle for their own use, subject to various conditions stipulated in the law. This concession depending on its “cc of the vehicle” allows re-migrants to pay significantly reduced taxes on vehicle imports, i.e., 10%, 20%, or 30% excise tax, depending on its engine capacity. It said that a normal taxpayer importing or buying an unlimited engine size, high-end vehicles usually pays in excess of $44 million in taxes, versus a maximum of $6 million that a purported remigrant would incur for the same vehicle.
“This has allowed for unscrupulous person(s), including some auto dealers, seeking to utilize this system, by enticing potential remigrants for monetary gain, to travel to Guyana, apply for the remigrant status and a high-end vehicle, then leave the jurisdiction. More alarming is that many of the applicants have little or no financial means, nor a bank account, are not even registered, nor filed tax returns in their country of origin, or sometimes do not even possess a driver’s licence in the foreign jurisdiction. When their documents are submitted and analyzed, they often show little or no funds for years, but prior to or after the receipt of the approval, large and sudden cash injections into their just opened bank account, local or foreign, and from unknown persons and benefactors, who are nowhere to be found or refuse collaboration, of the deposit (as was in the case ruled on by the Chief Justice), all with the intention of facilitating the purchase of high-end vehicles. The vehicles are then utilized or purchased by ineligible persons, through the process of powers of Attorney, or possession, resulting in tens of millions revenue losses to the State”, the GRA stated.
The statement said that this practice is becoming so prevalent that the GRA has even seen employees of certain treaty-exempt organisations and even public servants being involved in the said activity, hence the resort by the Authority to the “he who asserts must prove” principle, by requesting the source(s) of funds used in the acquisition of the said high-end vehicle.
The Revenue Authority said it is aware of, and takes seriously, its roles and responsibilities, as mandated by the various laws of Guyana that it administers. The Authority is also a Supervisory Authority tasked with regulating and ensuring compliance with the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Act, Cap 10:11, another reason/rationale for the “source of funds’ request.
The Authority also has certain tax and information treaties with several jurisdictions and is further obliged as a Supervisory Authority under the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Act, to share such information with its counterparts. The Authority fully intends to do so by the filing of “Suspicious Activity Reports” of these transactions, the statement said.
The Revenue Authority said it is in the process of appealing the decision, considering the huge tax implications to the State and its obligations under the various administered Acts. The Authority will also explore all options at its disposal to ensure the system is not abused and to protect the nation’s revenue.
On December 3rd, Chief Justice (ag) Roxane George struck down and quashed the requirements imposed by the GRA that a remigrant who had applied for a duty-free concession for his new Toyota Land Cruiser, provide the source of funds for the vehicle’s purchase.