Auditor General, Anand Goolsarran, has recommended that the Inland Revenue Department (IRD) carry out a special exercise to determine how many self-employed persons there are in Guyana who are liable to pay income taxes as only $581.759 million were collected from this category in 2000.
He made a similar recommendation to determine how many inactive companies were on the department's register so that appropriate action could be taken against companies which have failed to submit annual returns.
Goolsarran said the department did not have a listing of all self-employed persons in Guyana who are liable to pay income taxes and noted that only $2.3 million was collected as professional fees from 240 persons. This, he said, meant a "significant number" of professionals did not honour their obligations to the IRD.
The IRD's records also showed that 227 professionals did not renew their practice certificates in 2000 and there were no records to show whether these persons ceased to practice.
"It is recommended that a survey be carried out and a database created in respect of professionals. This record will enable the department to ascertain which professionals have been honouring their obligations ...," Goolsarran said.
In his report on the public accounts for 2000, Goolsarran highlighted that for that year, only 691 companies filed annual returns as against 3,346 companies on record. The total number of companies on record is 3,547 but of these, 201 were identified as defunct. Goolsarran said it could not be determined how many of the remaining 3346 were inactive.
The auditor general also recommended that the IRD carry out periodic checks of the records of banking institutions to allow for verification of the returns on which withholding taxes are based. The department collected $1.2 billion in withholding taxes in 2000.
For 2000, the department collected $18.9 billion in revenue, a $2.9 billion increase over 1999. The sum of $7.064 billion was collected as corporation taxes, of which $6.794 billion were from the private sector. Collections from the government sector were $267.690 million compared with a budgeted target of $544.540 million.
An amount of $1.059 billion was collected as travel tax of which $627.173 million was for travel voucher tax. However, Goolsarran highlighted that three airlines were in default in the payment of the travel voucher tax and penalties totalling $4.2 million were imposed. He said there were several other instances of late payments of this tax but no evidence of penalties imposed. One legal suit was instituted against an airline for taxes amounting to $63 million, which were outstanding prior to and during 2000.
The sum of $74.885 million was collected as hotel accommodation tax but Goolsarran said there was no evidence that periodic inspections were carried out by the IRD at the various hotels to ascertain the accuracy of the returns submitted to the department.
He noted that hotels with 16 rooms and over were supposed to pay the 10 per cent hotel tax within 15 days of the close of the month, but during 2000 five hotels did not honour their obligations for an aggregate of 30 months. He said there were also several instances where returns were submitted as much as two to over six months late. Evidence of penalties for late submissions was seen but Goolsarran said there was no evidence of actions taken against the five hotels referred to above.
Contacted for a comment, IRD Commissioner Kurshid Sattaur said he could not speak to the press on this issue as his department would have to make explanations to the Public Accounts Committee.