- still can’t present records of exemptions facilitated through GGMC, GO-Invest despite previous warning
– Auditor General Report
The Office of the Auditor General made note that the Guyana Revenue Authority (GRA) oversaw tax-exemptions to the tune of $64B in 2017, which is even more than the revenue foregone by the same mean in 2016.
This note was made in the Auditor General’s latest report covering the fiscal year ended 2017. The report was handed to the National Assembly last Thursday.
The report stated, “Exemptions from duties and taxes totalled $64.312 billion (US$321M) for the period under review, as compared to $56.073 billion in 2016. This represents an increase of $8.239B over the corresponding period.”
Auditor General, Deodat Sharma
GRA Commissioner, Godfrey Statia
Auditors were keen to note that the value of revenue foregone for the year 2017 represents 37.52 percent of the actual revenue collections by the Authority.
For the same period, Guyana’s debt grew by US$82M up from US$1.766B to US$1.848B. The debt could have been reduced had Guyana cut back on its tax exemptions.
The Audit Office presented a table that provided overall details about the value of exemptions granted to eligible categories.
The table below gives details of tax exemptions granted according to concession categories.
The table indicated that tax exemptions granted to companies and businesses represented 57 percent equivalent to $36.4B of the total exemptions granted.
Most of the exemptions were from businesses, mining investments through GGMC, and Investments through Go-Invest.
However, the Audit Office noted that the total value of tax exemptions granted in respect of Investment Agreements facilitated through Go-Invest and GGMC could not have been determined.
Audit Office said that a review of GRA records revealed that that there were 58 investment agreements; 55 were approved and three were denied during the year 2017.
The report stated, “In the 2016 Auditor General’s Annual Report, Management assured that the IT Division is in the process of implementing a system that will facilitate a breakdown of the ‘Companies/Businesses’ category so that more informative reports can be generated. However, at the time of reporting in 2018, the Authority failed to provide these breakdowns.
This newspaper revisited that Audit Office’s 2016 report and indeed it was stated, “…the total value of tax exemptions granted in respect of Investment Agreements facilitated through the Guyana Office for Investment and the Guyana Geology & Mines Commission could not have been determined. A review of the records of the Authority revealed that a total of fifty-nine agreements in respect of forty-one investors were approved during the year 2016.”
Further, in the 2016 report, the Audit Office stated, “It should be noted that in accordance with the Investment Act №. 1 of 2004, a procedural audit of the incentives granted to an investor or an investment enterprise is required to be carried out annually by the Auditor General. However, no records/documentations were submitted to facilitate these audits.”
This continues to be the state of affairs. In the 2017 report, the Office noted that the audit could not have been done as “at the time of reporting, schedules were presented for various companies that benefited from exemptions through GO-INVEST and GGMC. It was agreed that other related documentations would be sorted and presented for audit review.”
GRA acknowledgement of the comments of the Auditors was reflected in the report.
GRA said, “The categories (Companies/Businesses) of tax exemptions in the report are those that were built into the system several years ago and are subject to limitations. However, the breakout feature was implemented on 17th April 2018 to facilitate the value of tax exemption granted in respect of Investment Agreements through Guyana Geology & Mines (GGMC) and Guyana Office Investment (GO-Invest).”
GRA continued, “Nonetheless, it must be noted that although the breakout feature was implemented in 2018, it cannot provide previous data thus, the value of tax exemption for the year 2017 would not be available. The reports on the tax exemption granted in respect of Investment Agreements through GO-Invest and GGMC for the year 2017 was submitted to the Auditors (on 10 September 2018) thus facilitating the audit procedures.”
The Audit Office recommended that the Authority “continue in its efforts to have the other documentation presented to facilitate audit procedures.”