GRA breaks silence on DDL tax settlement

first_img– says deal prevented additional years of litigationAlmost a week after the Demerara Distillers Limited (DDL) announced that it has managed to settle a 14-year-old Consumption Tax litigation with the Guyana Revenue Authority (GRA) for $1.5 billion, the revenue body has finally commented publicly on the issue which has stirred much controversy, announcing that the decision has avoided years of litigation.The GRA in a statement which also took a swipe at Leader of the Opposition and Former President, Bharrat Jagdeo, said that it does not encourage discussions about taxpayers’ issues or information in the public domain.However, it said it was forced to respond to comments purportedly made by Jagdeo, who described the settlement as “scandalous”.Jagdeo in a statement on Saturday evening said that the out of court settlement sets the wrong precedence and could open the gate for other companies to seek tax refunds.“The settlement sends the wrong message to the business community – that a company can unilaterally decide to stop paying taxes while other companies comply with the law, take the matter to court, and drag it out until a sympathetic Government comes to power and settles its debts to the State,” Jagdeo said.But, the GRA said it was “disappointing” that Jagdeo, who ought to have known better, would seek to expose the business of a taxpayer as well as attempt to have information on other taxpayers disclosed, even though he knows that these are violations of the oath of secrecy that the GRA is mandated to protect.“The GRA also finds it astonishing that, given the history of violations of taxpayers’ privacy that occurred under his Government’s stewardship, which Guyanese found repugnant, that he would want to encourage the GRA to continue to operate along those unacceptable lines,” the statement added.The GRA in defending its decision said that the matter has been engaging the courts since 2002, and already cost the nation significant amounts of monies and accused Jagdeo of wanting to “reconstruct the 14 years of failure by his Government to bring this matter to an end.”“After almost 14 years with no satisfactory outcome insight, the GRA exercised its right to settlement in order to avoid more years of litigation and the consequent loss to the national coffers as DDL was likely to take the matter to the CCJ,” is stated, adding that the settlement was calculated based on what the law permits.Jagdeo has been arguing that since the settlement was arrived at only on March 9, 2016, it means DDL had use of the money for 15 years.“If one were to calculate interest on this sum at a rate of 10 per cent per annum, using only the past 10 years, the liability would amount to $10.6 billion. The GRA assessment of $5.392 billion was based on a formula handed down by the court, but yet DDL refused to pay,” Jagdeo stated.According to Jagdeo, the settlement also writes off all possible liabilities in respect of Excise Tax up to March 9, 2016.“So if the same situation obtains with regard to the Excise tax between 2006 and 2016, then the liabilities would run into tens of billions more,” he contended.However, the GRA argues that based on Jagdeo’s formula, Government actually gained a profit of G$231 million under the scenario he proffered.“Mr Jagdeo is fully aware that once a debt owed exceeds one year, its value must be discounted for every year it remains uncollected… During that 15-year period of litigation and based on the interest rate of 10 per cent that he chose, his G$5.3 billion would have been worth G$1.3 billion to the Government after 15 years,” the GRA said.It added that it finds the former Finance Minister’s objection to its efforts to have an amicable relationship with taxpayers, including those in the business community troubling.“The tone of his views as reported in the newspapers present taxpayers as if they are to be enemies of the State. It is therefore, important for the GRA to reiterate that it views taxpayers as partners in the development of Guyana and therefore, explores all avenues available to have taxpayers honour their tax obligations without prejudice and at the same create an enabling environment for legitimate businesses,” the statement concluded.last_img read more

Read More »