August 7 2019
-Statia maintains all transactions above board
As part of its audit of the 2018 operations of the Guyana Revenue Authority (GRA), the Audit Office of Guyana has raised concerns about the disposal of Want of Entry vehicles but Commissioner General (CG) Godfrey Statia has assured that the questions are routine and the procedure used has been above board in every case.
A draft of the audit report, seen by Stabroek News, raises questions about more than 100 vehicles advertised for sale between July 2018 and February 2019. It has been sent to the GRA for a response.
Want of Entry vehicles are those for which no entry taxes have been paid by the importer.
In an invited comment yesterday, Statia noted that his office will respond to each query, while explaining that his cursory examination shows that concerns raised appear to stem from a lack of understanding of the process.
“There seems to be several references to advertised vehicles but there is a claim period of 30 days following advertisement when anyone with a claim can approach the authority to pay sums owed. Persons often come and pay after the ad has been placed,” he explained.
The report references a sealed bid held on the third and fourth of July 2018 during which 28 vehicles were disposed of. The status of six of the vehicles could not be determined while another two had been registered to two government agencies instead of the highest bidders. Additionally, four vehicles were sold to individuals who expressed their interest via letters to the CG.
“It should be noted that the prices offered for three of the vehicles were below market value and the vehicles were not part of the competitive bidding process,” the report states.
Another set of 92 vehicles was, according to the audit, published in the Official Gazette on March 31, 2018 but only 13 were disposed of via sealed bids as of this month.
“As such it could not be determined how, when or if the remaining 73 were disposed of by the authority,” it was noted.
In September 71 vehicles were disposed of via sealed bid but the audit office could not determine if 27 of these bidders had honoured their obligation. One vehicles was removed from the warehouse after publication and before sale while one Honda ATV was sold for $161,000 to an individual who did not bid. A sealed bid received for this ATV was for the sum of $285,000.
A further 48 vehicles were advertised in the Gazette on November 10, and of this number two were disposed of via sealed bids, 12 were disposed of by an unknown method other than sealed bids while the status of the remaining 28 was unknown at the time of audit.
Concerns were also raised about 34 vehicles disposed of in February 2019 and there is evidence, according to the Audit Office, that one of the vehicles was not sold to any of the successful bidders and another sold for $400,000, while the highest bid was $1.8 million.
It was also reported that while nine of these vehicles were removed by request of the CG, no documentation to substantiate same was presented.
“Of the 9 vehicles removed two were removed after publication [however] 194 bids were received by intended purchasers resulting in an estimated loss of revenue valued at $14.475M,” the report said.
Concerns about the disposal of Want of Entry and seized vehicles were raised in June by Opposition Leader Bharrat Jagdeo, who claimed that the GRA has seized and disposed of hundreds of luxury vehicles that never made it to the register for Want of Entry, were never auctioned, but were fraudulently transferred and found their way into the hands of people sympathetic to the government or “given to family and friends,” resulting in billions of dollars in lost revenue.
Innuendoes and allegations
Statia, in responding to the allegations then, characterised such claims as misleading. He said that while he would prefer not to respond to statements made by politicians, the claims made by Jagdeo were “misleading, filled with innuendos and allegations of fraud, create public mischief, and are meant to tarnish the efforts at rebuilding the reputation” of the GRA.
Even as he highlighted that over the years, the revenue netted from the disposal of seized vehicles has increased substantially to the hundreds of millions, Statia had explained that there were generally two categories of vehicles disposed of by the GRA: Want of Entry vehicles and Seized vehicles.
Want of Entry vehicles are disposed of through sealed bids after the said vehicles are placed in the Official Gazette and subsequently advertised if claims were not made during the mandated claim period. Statia observed that sealed bids were introduced in late 2016 for the very reason of collusion and revenue loss.
He said that interested bidders are given the opportunity to examine the assets before submitting the actual bids. The award goes to the highest bidder once the bid is equal or above an amount sufficient to pay all duties, expenses, rent and charge.
However, if the bidder fails to honour his/her obligations as the awardee, the motor vehicles may be re-advertised or the Commissioner-General may dispose of same in accordance with Section 90 (4) of the Customs Act, which provides that “If any goods on being offered for sale as aforesaid cannot be sold for a sum sufficient to pay all duties, expenses, rent and charges, the same may be destroyed, or otherwise disposed of as the Commissioner-General may direct,” the statement said.
“Disposal of Want of Entry or Seizures are done, at all times, in a fair, impartial and transparent manner with the Internal and State Auditors playing their respective roles. Consequently, the GRA welcomes any audit by the Auditor General who audits such transactions on a yearly basis, and report his findings to the Public Accounts Committee,” Statia had declared.
Regarding disposal of seized vehicles, he said that under sections 218 and 224 of the Customs Act, the Commissioner-General may, given the nature of the offence, allow the individual in question to pay a fine in lieu of court proceedings or he may dispose of the seizure as he deems fit accordingly.
Statia pointed out that in some instances, seized or Want of Entry vehicles are disposed of by way of assignment to other state entities such as the Guyana Police Force, the Guyana Prison Service, the Guyana Defence Force, the Ministry of Health and other departments that require resources for effective functioning.
“This has always been the practice and the exercise of such discretion is not unique to Guyana,” he said.
Statia further pointed out that notwithstanding the wide powers given to the Commissioner-General to dispose of seized vehicles as he sees fit, “such disposals are done in a fair and consistent manner to ensure maximum collection of revenues by the state.”
In this regard, he highlighted that despite the numerous assignments to government agencies, the revenue collection for such seizures and want of entries increased from $154.5 million in 2013 to over $750 million for this year so far. For the other years, the figures were $185.7 million in 2014, increasing to $210.3 million in 2015, then to $268.5 million in 2016, further increasing to $349.2 million in 2017, and $646.2 million in 2018. For this year, up to the third week of June, $750.1 million had been netted.