Tax Reform report still under review – Jordan

first_img…claims Govt uncomfortable with some recommendationsThe much-vaunted Tax Reform Committee report, which contained a number of recommendations to the coalition Government — including recommendations that ministers and the President pay taxes — is still being reviewed.This is according to Finance Minister Winston Jordan in an interview with this publication. While he denied that the Government was hesitant, Jordan admitted that it was uncomfortable implementing some of the measures.“A report done by anybody and submitted to the client is for the client to determine what they will do to the report. It is for the client to determine. It is up to the client to determine the efficacy, timeliness of the recommendation.“Some of the measures we are uncomfortable with,” Jordan told this publication.“So we will not be implementing (them). I can say off-hand they asked for us to put a tax on pensions, and we refused to do that. It’s not about hesitancy. Every recommendation that has been made is just that — a recommendation; and it is up to the client to accept, reject or vary the recommendations.”Jordan claimed that otherwise, every consultant the Government hired could come up with recommendations that do not have a factual basis, and the Government would be forced to implement them.“We will go through each recommendation and we will either implement it in full, part, or none at all.”In 2015, the Government had established the Tax Reform Committee, headed by Dr Maurice Odle. The committee’s mandate was to examine the country’s taxation system and make recommendations for fixing it. The committee had reported its findings to the Finance Minister in January 2016.Among its recommendations were: an income tax threshold of $750,000 with progressive rates of taxation from 20% to 35%; reintroduction of estate duties, and levies on tobacco and alcohol.Last month, Chartered Accountant and reform committee member Christopher Ram had criticised the Government for the delay in implementing several crucial recommendations. Specifically, he had zeroed in on the administration’s failure to adopt recommendations that income tax exemptions be removed from office holders such as the President, Attorney General, Auditor General, and the Chancellor of the Judiciary.“Some of the recommendations were expected to be controversial, particularly those designed to have a redistributive effect: such as the reintroduction of estate duty and taxation of dividends above a certain level,” Ram had said. “There were also some that mixed revenue with social policy, such as a tobacco levy and a health levy on alcoholic beverages.“These are only some of the unimplemented measures available to the Minister of Finance. The Tax Reform Commission had estimated that its proposals excluding amnesty, government transfers, etc, would be revenue neutral, but that there would be some rebalancing in the system.”But the Guyana Revenue Authority (GRA) itself has announced intentions to reform its tax incentive system. According to GRA Commissioner General Godfrey Statia at a recent engagement with manufacturing sector representatives, they are looking at replacing exemptions with credits.According to the finance specialist, replacing exemptions with credit would assist in creating a level playing field.Instead of reducing taxable income, tax credits actually reduce the amount of taxes owed. But while tax exemptions are still available, Statia was critical of some businesses not taking advantage of them.“Many businesses also do not adequately realize various tax concessions available under the act. Until the advent of tax credits, maybe introduced instead of exemptions, businesses must trudge through the various acts. Small businesses in particular do not reap the rewards available under the Small Business Act.“Exemptions go a begging, and the various allowances are often not utilized. Yet, complaints are made when foreign companies benefit and local companies do not. These are available to all competitors in the market, and should be used,” Statia had pronounced.last_img read more

Continue reading