In 2021, tax exemptions granted by the Government came up to $266.774 Billion, which represents $11 Billion more than what was earned by the Guyana Revenue Authority (GRA) in revenues for the same year.
In the Auditor General’s 2021 Report on the Public Accounts of Guyana, it was revealed that the GRA raked in approximately $255.086B in revenue for 2021.
The report, which was laid in the National Assembly on Monday said “exemptions from duties and taxes totaled $266.774 billion for the period under review as compared to $137 billion in 2020. This represents an increase of $129.774 billion or 94.78% over the corresponding period”.
It was explained that the value of revenue forgone for the year 2021 represented 97.09% of total collections by the Revenue Authority, as compared to 2020 where exemptions represented 62.75% of the actual revenue collected.
According to the Audit Office, tax exemptions granted to companies and businesses represented 95.1% or $235.486 billion of the total conditional exemptions granted.
“Tax exemptions in this category were 97.5% or $116.252 billion more than the previous year. This increase resulted from the upsurge in the conditional Investment Agreements facilitated through the Guyana Office for Investment (Go-Invest) and the Guyana Geology and Mines Commission (GGMC), as well as exemptions granted to the oil and gas sector,” it explained.
In defending the exemptions offered, GRA’s Commissioner-General Godfrey Statia said that the exemptions were in keeping with the laws of the country.
“GRA wishes to again reiterate that its role with the exemptions regime is administrative and hence to administer the various conduits through which concessions are granted, these concessions are etched in law and/or policies and are non-discretionary on the part of the GRA,” the GRA official was quoted as saying in the report.
It was reported further that the Commissioner-General has expressed a preference for the removal of the concession regime and to replace it with the system of tax credits, as practiced in developed nations.
Weighing in on the issue, the Audit Office explained that exemptions to the oil and gas sector have a legal underpinning as a result of the provisions of the Production Sharing Agreement (PSA) between ExxonMobil and its partners and the Government.
“As a matter of fact, the GRA expects that as production and exploration activities are amplified in the Stabroek and other blocks, exemptions will increase exponentially,” the Audit Office said.
Meanwhile, with regards to the revenues actually collected, the Audit Office said that the sum of $242.091 billion was estimated to have been collected as revenue for 2021, however, some $255.086 billion was collected and paid over to the Consolidated Fund as of December 31, 2021.
It noted that the amount paid over when compared to the estimated amount represented a $12.995 billion increase.
However, the Audit Office said notwithstanding this increase there were substantial shortfalls for the revenue categories of Income Tax on Self-employed, Other Personal Tax, Corporation Tax on Public Sector Companies, Environmental Levy, Liquor Licence, Miscellaneous Penalties, Travel Voucher & Travel Tax, VAT on Import Goods and Domestic Supply and Excise Tax on Petroleum Products and Tobacco totaling $10.349 billion.
In its response, the GRA explained that for the period August to December 2021, a revised revenue target was used.
Initially, the approved target was set at $242.09 billion but was subsequently revised upwards to $254.96B, an increase of $12.87 billion or 5.3%.