GRA demanding 2% withholding tax

law discriminate against local companies

…has potential to be a broad-based tax

The Guyana Revenue Authority (GRA) is demanding that individuals and companies who are receiving more than $500,000 for the supply of services, goods, materials, equipment or personnel in the furtherance of services deduct a two per cent withholding tax and remit same to the tax authority.
This tax will be given as a tax credit when the individual or company files the requisite income/corporate tax return.
This newspaper was told that while contractors typically meant those engaged in construction and similar activities, this new imposition seems to expand on that definition to include just about anyone doing just about anything.

Some ministries have already begun deducting the two per cent withholding tax on monies paid to its suppliers.
According to a prominent businessman, if that is the intended application, then individuals and companies will have to follow suit and deduct two per cent on all types of bills including electricity bills, fuel purchases, salaries and wages, purchases of raw materials and so on once the amount is over $500,000 and the supplier is a resident individual or corporation.
“If this is what was intended, it will be a tax most bizarre and will spell further doom for entrepreneurs and businesses in Guyana,” one businessman expressed to Guyana Times.
According to the GRA website, the two per cent withheld for all contractors must be remitted to the GRA on a monthly basis or within 30 days of making the payment to the contractor.
The website also explained that where any deduction and remittance have not been made by the person liable, the person not making the deductions of withholding tax will be held liable for the amounts outstanding.
These new measures came into effect February 1, 2017. However this is not applicable to foreign trade companies but rather serves as a discriminatory measure to local businesses.