January 5 2020
Dear Editor,
I refer to Mike McCormack’s letter in the Friday edition of your paper in which he noted that based on figures published, the gold industry earned $1.5 trillion (not billion but trillion) between 1980 and 2019. These are interesting figures for those who research inequalities in the tax collection system in Guyana. Prior to 2014, property tax was payable from possession of assets worth from $7 million up.
Yet prior to 2014, when it was changed to assets of $40 million and up, property tax’s contribution to the overall final sum of revenue garnered by the tax agency was nil. In 2018, it was $4 billion. Anyone with a tiny knowledge of economics and financial science would know that if between 1980 to the present, the gold industry generated one and a half trillion Guyanese dollars then, (1) how come only from 2018 property tax was actually collected and (2) how could it have been $4 billion only?
There is ownership of individual assets that each would produce $4 billion in property tax. There are family-owned assets that each, separately would produce $4 billion in property tax when properly assessed by the GRA. How then can total collection from all possessors of assets worth more than $40 million in the entire Guyana generate only $4 billion in 2018? Something is not only wrong here but is deadly mysterious.
I end on a little story that has never been published in the newspapers. I know of this because it was told to me by one of the closest comrades of President Forbes Burnham. Burnham wanted a large building belonging to one of the wealthiest families of Guyana at the time for the purpose of using it for government business. The family refused to sell based on the price Burnham’s negotiators had advanced.
No doubt Burnham was the one who had fixed the price range. What Burnham did next pleased my heart. Burnham said to the head of the family business that the family has never paid any kind of taxes and only a minor sum of PAYE. The list included company tax, property taxes, etc. Burnham, speaking directly to the head of the family business, said that the family is always recording a loss but has never failed to keep buying large tracts of land all over Guyana.
Burnham then stopped the negotiations and informed the family that Inland Revenue would audit the family’s books. Contrary to what is still peddled today that Burnham compulsorily bought the building, that is not so. The family contacted the negotiators and agreed to the government’s price.
What people do not know up to this day was that the family was cornered and saved itself through its agreement to sell because an audit would have revealed that it owed the Inland Revenue more than what the actual building cost. The story here is one that holds lessons for the tax collector. If you are not producing a profit then where do you get the money to acquire assets?
I will never be a fan of Forbes Burnham but at the same time I will always be cautious and careful in my holistic analysis of his reign. He did have his strong points which sadly have never been acknowledged by those who really hate him or even those who dislike him.
Yours faithfully,
Frederick Kissoon