The Guyana tax net must be widened Viewpoint By Mr Sasenarine Singh Guyana Chronicle March 10, 2000 FOR the Government of Guyana to fulfill some of its promises to the people, there must be sustainable revenue growth without increasing the current pressure on law-abiding taxpayers. For this to take place, the tax net must be widened to ensure that tax cheaters are exposed. Citizens must be made to respect the Revenue Authority as an agency that will collect the taxes due whatever it takes. With this in mind, the Authority has its work cut out for it. It will be tasked with doing a better job than its predecessors at finding tax cheaters and making them pay up. Because of this, the new agency must be given the resources to allow its officers to execute their jobs without fear or favour. Will officers of the Authority who were successful at exposing a tax cheater, be eligible for a performance bonus? Over the years, the decline in enforcement has become so significant that it currently threatens to undermine our entire system of voluntary tax compliance by our law-abiding taxpayers. The Revenue Authority must focus on illegitimate tax deductions and tax shelters that make profits and customs dues invisible to the investigating officers. The self-employed taxpayers have fallen short of projections repeatedly. This category of taxpayers must be investigated more aggressively to uncover cases of tax evasion. For some importers/exporters who under-reported their profits to IRD, check musts be made on the volumes of trade carried out every year and likely profit projections must be computed and tested against actual profit declaration. Tests can be made on the National Insurance record of self-employed tradesmen to determine likely taxable profits. The revenue collection system is so disorganised that sometimes the intelligence available at Customs House is not available to IRD. This weakness among others, has led to growing timidity and corruption by some of our front line revenue officials allowing more tax cheaters to get away with not paying what they owe. That is why the merger of the two departments into one body corporate should be seen as a step in the right direction. The new Authority should be able to improve the effectiveness of monitoring the taxable public and as a bonus, reducing internal costs via merger of services departments, for example the human resources and computer departments. An essential area that must be looked at is service to the tax-paying public. As a legitimate taxpayer, I found it extremely difficult to get any information of value out of the former IRD. The Authority should hire more people knowledgeable enough to answer telephone calls for tax information and giving informed answers in return. The bottom line is people's confidence in our tax system must be improved and this can only be done if we the tax paying public perceive that the tax system works. More effective enforcement goes hand in hand with improved service to the law-abiding taxpayers. Our entire tax system depends on the good corporate citizens and the self-employed who attempt to pay their taxes that are due, having the confidence that they are being treated fairly and that their competitors and neighbours are also paying what is due. If these taxpayers conclude over a period that the Revenue Authority cannot meet these basic expectations, the risk to the tax system will rise even higher. COURTS, the furniture giants at a press conference last week alluded to unfair competition due to smuggling and tax evasion by its competitors. If good corporate citizens like COURTS feel over the long term it might be a better strategy to operate like their competitors and evade taxes, the effects will be disastrous for this nation and will be extraordinarily expensive to reverse. Therefore the best thing to do is to go after the tax cheaters now. Maybe our Revenue Authority can paraphrase the American IRS motto for last year by declaring this year as the year to provide Guyanese taxpayers with top quality service by helping them understand and meet their tax responsibilities and by applying the tax law with integrity and fairness for all. I believe that if we can set up the team with the integrity and pay them well, the job could be done. We are off to an excellent start by appointing a man of impeccable integrity and professionalism - Mr Edgar Heyligar as the new tax czar. It is up to him now to select the team and get the job done.