GRA prepared for VAT implementation
- non-compliant entities to face stiff penalties
Guyana Chronicle
December 29, 2006
With just a few days to go before the implementation of the Value Added Tax (VAT), just about 70% of local eligible businesses have been certified to charge the tax.
However, all the necessary systems are in place to begin its implementation.
This point was underscored by the Commissioner General of the Guyana Revenue Authority Kurshid Sattaur, yesterday, at a media briefing called to provide an update on the process.
He assured that his organization continues to put measures in place to ensure the smooth transition from the present method to the VAT system, which replaces six existing taxes.
Sattaur informed that to date, just about 1000 of the 2,500 businesses with a turnover of $10M have received certification, however, another 133 registrations are being processed.
He added that the GRA will continue to solicit the support of the other 30% of businesses to register before the December 31, 2006 deadline, as required by the VAT law.
If those businesses that are required by law to register fail to do so, the Commissioner-General will register them.
However, there will be penalties attached to late registration.
Sattaur also noted that there have been a number of voluntary applications. However, he said some have been declined because the GRA has to be confident that those applicants are able to maintain adequate records, submit monthly returns and have a fixed place of business.
The Commissioner-General assured that during the coming weeks efforts will continue with VAT outreach programmes to businesses, offering advice and assistance in the event that there are uncertainties and hiccups.
Concerning the new system, Sattaur informed that the GRA has in place procedures at customs locations at the main ports of entry, including at the Cheddi Jagan International Airport , the Wharves and the Customs and Trade Administration, Main Street .
He said the Total Revenue Integrated Processing System (TRIPS) has been tested and is operational. On January 1, 2007, there will be officers on hand at the CJIA in the event that there is any failure to ensure that the system is fixed immediately.
At the airport and Customs House, the TRIPS will be used to carry out VAT processing whereas at the wharf and branch offices the calculations will be done manually until the Wide Areas Network (WAN) becomes operational.
Additionally, Customs officers will continue to be trained to effectively administer the system and properly calculate the VAT.
He noted that customers, as a major group of stakeholders in the VAT system, have an important responsibility in the process.
“While the government is committed to monitoring the system to ensure that there is no undue hardship on consumers, we want to urge consumers to be vigilant so that they are not exploited or unconsciously contribute to tax fraud.
He informed that it is the consumers' responsibility to look for the registration certificate or ask if the business is registered, request a receipt, report any suspected fraud to the GRA and to encourage their supplier to register.
He also encouraged consumers to know the amount of tax they should pay.
Sattaur reiterated that the full force of the law will be enforced on those businesses who fail to comply with the VAT regulations.
However he pointed out that the procedure to be employed by the GRA will be one of persuasion towards voluntary compliance.
He also assured that the staff deficiencies to manage the new system which was previously highlighted, has been addressed.
To date, some 85% of the staff has been garnered, he said.
“We have adequate staff to do the work at this stage, but more will be added as we need to carry out functions. In the next six months we will need auditors and enforcement officers, but right now we will not be using the big stick method but rather will be soliciting and encouraging support, and we have the staff we need to do that, as well as to start the process,” Sattaur said.
Pointing out the benefits to be derived from businesses registering, he noted that those that are not certified will have the tax added on to their imports, but will not be able to recover it.
“ It is in their best interest that businesses register because from January first; everyone who imports goods will be charged, but those that are not registered will not be able to recover the taxes from the consumer.” Meanwhile, he reminded that under the new system, it is necessary for businesses to keep a number of records .
These includes tax and sales invoices, purchase and sales ledgers, a summary of cash receipts and cash payments, till roles and tapes, and customs imports and export documents