First VAT returns: GRA waives penalty for those still to file
Guyana Chronicle
March 7, 2007
THE Guyana Revenue Authority (GRA) yesterday announced it is granting a penalty waiver for the few remaining businesses that have failed to make their first VAT returns under Guyana’s new tax system, to comply with their legal obligation.
Under the VAT legislation, it noted, registered businesses must make a monthly return of the VAT they have incurred on their purchases and overhead costs, and the VAT they have collected from their customers, and they must pay the difference to the authority.
This must be done within 15 working days following the end of the month, the GRA reminded.
Commissioner, VAT and Excise Tax, Ms. Hema Khan, said “Returns and payments for the month of January - the first monthly tax period under VAT - were due on 21 February.
“In fact, a very high proportion of businesses - more than 79 per cent - met this deadline. This was one of the highest percentages of returns for any new VAT implementation anywhere in the world. Since then, the figure has risen to more than 80 per cent.”
“In normal circumstances, the VAT legislation dictates that persons who are late in making their returns are liable to a penalty of $1,000 for each day that the return is not made, or ten per cent of the tax that is due for each month that the return is outstanding - whichever is the greater. In addition interest is payable on the outstanding amount of tax at a rate of two per cent simple interest per month, or part of a month”, Khan noted.
She said however, that since this is the first time that businesses have been required to make a VAT return “it is possible that some businesses have had difficulty in understanding or meeting their legal obligations, in spite of the widespread publicity and assistance from the GRA.”
Khan said the VAT Department has received several requests for extension of time and for filing and waiver of penalties and interest for the first VAT return.
“We have therefore decided to give them the benefit of the doubt and to take a lenient view on this occasion. In order to be as helpful as we can, we have extended the date for filing the January VAT returns until Friday 9 March and we will waive penalties for those who have filed by then.”
Khan said Section 85 (1) of the VAT Act allows for such provisions.
“However, it must be clearly understood that the full amount of interest will still be payable since this cannot be waived.
“I should stress that this is a ‘one-off’ concession. Returns and payments for the month of February are due to be made by Thursday, March 22. There will be no extension of this date.
“Also, although we have waived penalties for those who have failed to file their January returns on time, they will be liable still to pay any interest that has accrued from the date they should have paid the tax due for the month of January.”
Khan stressed that there will be no leniency for those who are legally required to register for VAT but have failed to do so.
“Those businesses who have failed to register are damaging the economy and are working against the interest of all Guyanese and they should be aware that they face a penalty of double the amount of tax they should have collected since the time they should have first registered, plus interest and late filing penalties – or they could face a fine of $25,000 and imprisonment for two years.
“We have intelligence about these businesses. We are currently identifying them and will take action against them. It would be in their own interest to register now before we contact them.”