Acting Chief Justice Roxane George, has ordered the Guyana Revenue Authority to take the excise rate on vehicles for re-migrants with engines larger than 3000cc back to 10% after declaring the implementation of a new 30% rate as illegal.
The Chief Justice also ordered the GRA to pay refunds to all those re-migrants who might have already paid the illegal 30% rate.
The case was filed by re-migrant Aditya Basdeo who had been granted duty free concessions as a re-re-migrant, but was informed by the GRA that he would have to pay 30% in excise taxes on his new 2023 Toyota Landcruiser.
Mr Basdeo took issue with GRA’s position, pointing out that the correct rate was 10%. There was no response to his letter and Court action was initiated.
Under the 10% rate, Basdeo was required to pay $1.5 million in taxes, but the GRA wanted him to pay an additional $3.1 million at its new 30% rate.
GRA Deputy Commissioner, Mr Gavin Low, responded to the re-migrant’s concerns by saying that regulations of 10th July, 2023 tripled the rate of excise taxes payable from 10% to 30%.
But it was later realised that for the past year, the GRA was tripling the excise taxes payable by re-migrants for vehicles with an engine size of 3,000cc and above, and doubling the excise taxes (at the rate of 20%) for vehicles with an engine size above 1,999cc and under 3,000cc.
When the matter came up for hearing before the Chief Justice on Monday morning, GRA’s Attorney, Nicklin Belgrave, reported that the GRA had made a mistake with the implementation of the new tax rate, because the Authority has since realized that the Minister of Finance had merely signed the Regulations, but they were not duly brought into force by being published in the Official Gazette or tabled in the National Assembly.
It was admitted that the GRA had been wrongfully and illegally charging 30% taxes to re-migrants and collecting those taxes without any authority.
The Chief Justice granted all of the orders sought by Mr. Basdeo through his attorney, Siand Dhurjon.
She declared that the GRA’s policy of requiring 30% excise taxes was unlawful and also granted an order quashing the assessment of the 30% excise taxes.
Additionally, the Chief Justice granted an order compelling the GRA to apply the correct excise tax of 10%.
It was also ordered that Mr. Basdeo’s vehicle must be released to him forthwith upon payment of the correct excise taxes.
Basdeo’s Landcruiser arrived in Guyana on the 28th June, 2024 and has been on the wharf racking up storage costs ever since.
The Chief Justice ordered that the GRA must pay the storage costs, as well as the costs of the lawsuit in a specified sum to Mr. Basdeo.
When presented with evidence that the GRA was charging some people 10% and others 30% during the same period, the GRA claimed that those paying 10% had applied for their exemption ‘before the regulation was passed’.
The Chief Justice remarked to the agreement of both counsel that the GRA should reach out to everyone who overpaid excise taxes and explain that the GRA made an error and refund the wrongfully collected monies to the taxpayers.
Attorney Dhurjon stated that “the Excise Act and its regulations do not permit the GRA to charge beyond 10% in excise taxes. For the last year the GRA has been overcharging remigrant taxpayers illegal excise taxes to the tune of hundreds of millions of dollars cumulatively. It is unfortunate that in oil-producing Guyana, taxpayers have been wrongfully subjected to this. But this verdict opens the door for all remigrants who paid above 10% in excise taxes to seek a refund.”
Under the re-migrant tax scheme Guyanese who lived abroad for 5 years can be given duty free concessions allowing them to import their personal effects and their vehicles by only paying the applicable excise taxes. When a re-migrant imports a vehicle and they are given the concession by the GRA, they do not have to pay customs duties and value-added taxes on the vehicle being imported. This removes many millions of dollars from the purchase of the vehicle. If the full taxes – all of the customs, VAT and excise taxes – were paid on a Landcruiser like the one concerned in the proceedings, a normal taxpayer would have to pay around $90,000,000 in total taxes depending on the value of the vehicle.
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