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FM
Former Member

Guyana now ties with Haiti for highest corporate tax in the region

Oct 15, 2017 News, https://www.kaieteurnewsonline...e-tax-in-the-region/

https://www.kaieteurnewsonline.com/images/2017/10/IDB-t.jpg

Mark Wenner of the Inter-American Development Bank (IDB).

High tax rates have a number of effects; on one hand, they can stimulate an increase in revenue that is desperately needed while on the other, it forces companies down the rabbit hole of tax evasion.

This sore issue was a focal point during the taxation discussions at the Business Summit hosted recently by the Private Sector Commission (PSC). It was revealed that Guyana has the highest Corporation Tax rate in the Caribbean along with Haiti.

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Guyana now ties with Haiti for highest corporate tax in the region

Oct 15, 2017 News, https://www.kaieteurnewsonline...e-tax-in-the-region/

By Kiana Wilburg
High tax rates have a number of effects; on one hand, they can stimulate an increase in revenue that is desperately needed while on the other, it forces companies down the rabbit hole of tax evasion.

This sore issue was a focal point during the taxation discussions at the Business Summit hosted recently by the Private Sector Commission (PSC).

It was revealed that Guyana has the highest Corporation Tax rate in the Caribbean along with Haiti.

Specifically raising this worrying issue was Mark Wenner of the Inter-American Development Bank (IDB). He was part of the panel that included GRA Commissioner General, Godfrey Statia; Chartered Accountant Christopher Ram; and Opposition Member and former Attorney General Anil Nandlall.

Wenner works with the Capital Markets and Financial Institutions Division of the Inter-American Development Bank and has published numerous articles on rural finance topics. He has also participated in a number of financing operations involving rural and microfinance organizations.

Wenner noted that one of the reasons why exemptions are often sought after by many companies is due to the fact that the tax rates of the nations they wish to operate in are very high. He said that if these rates are reduced then there would be less need for exemptions.

The IDB official said, β€œI think that is one of the dangers because here in Guyana, it’s a 45 percent corporation tax rate per Telecommunication Company, 40 percent for commercial company, and 28 percent for noncommercial companies…”

β€œWhen you compare Guyana to the rest of the Caribbean, Guyana is tied for first place with Haiti for the highest corporate tax rate. Other nations like Jamaica, Barbados, and Bahamas, they are in the 30s and 20s.”

A corporate tax, also called corporation tax or company tax, is a direct tax imposed by a jurisdiction on the income or capital of corporations or analogous legal entities. Many countries impose such taxes at the national level, and a similar tax may be imposed at state or local levels.
The graph attached to this article shows the Corporate Tax imposed by other Caribbean territories.
  https://www.kaieteurnewsonline.com/images/2017/10/cc.jpg

CONSEQUENCES OF HIGH RATES
Wenner was also critical of the fact that Guyana’s exemptions have been extremely high over the years. This is an area that has been flagged by the Tax Reform Commission which was established by the Granger administration.

Speaking to the genesis of this matter, the Tax Reform Commission said that between 2009 and 2013, two comprehensive studies on Guyana’s tax system and its administration were conducted. They opined that fundamental reform measures were proposed in both of these studies but the recommendations were not implemented.

Instead, in 2011, the PPP Government undertook major tax policy reversals when the Fiscal Management and Accountability Act of 2003 was amended to introduce more exemptions and remissions into the tax system.

The Commission members said that countries have generally been slow to roll back tax incentives, partly because it has been very difficult to determine whether the incentives are having the desired effect or not, in the absence of data that would facilitate serious research and investigation.

The advisors said, however, that a consensus has been slowly emerging that, outside of, for example, light manufacturing activities and internet-based call centre backroom services, tax incentives are not very effective in attracting foreign investment and merely result in a β€œrace to the bottom”.

The Commission also highlighted the strong views held by the International Monetary Fund, World Bank, the Organization for Economic Co-operation and Development (OECD) and other international institutions that countries such as Guyana, should focus more on the classical determinants of investment that are possibly within their control, along with other factors that facilitate β€˜doing business’ and rely less on tax incentives.

Besides size and factor resource endowment, the international organizations believe that determinants of investment should include consistent and stable macro-economic and fiscal policy; political stability; adequate physical, financial, legal and institutional infrastructure; effective, transparent and accountable public administration; skilled labour force and flexible labour code governing employer and employee relations; availability of adequate dispute resolution mechanisms; and foreign exchange rules and the ability to repatriate profits.

The Tax Reform Commission included the likes of Chartered Accountant, Christopher Ram, Commissioner General of the Guyana Revenue Authority (GRA), Godfrey Statia, NICIL’s Chairman, Dr. Maurice Odle and Economist, Dr. Thomas Singh.

FM

More fall out on this front, the incompetence of our benevolent jackass granger. 

Event unmasks APNU/AFC shortage of development plans – Ramsaroop

10

Business Summit 2017

β€¦β€œall we heard was the same tired rhetoric”

 

President David Granger on Wednesday demonstrated outright disdain for the Private Sector Commission (PSC) when that entity hosted β€˜Guyana Business Summit 2017’ at the Guyana Marriott Hotel. Instead of bringing some measure of hope to the business community, he has in fact instilled more reasons to be wary.
This perspective was expressed by Economic Advisor to the Opposition, Peter Ramsaroop, who this week examined the hotly anticipated Business Summit which was touted as the premier forum to bring together stakeholders from across the spectrum, inclusive of the political divide, to brainstorm solutions to bring about meaningful changes in the business and economic landscapes.
Ramsaroop said this time around it can only be seen as a slap in the face of the Private Sector for the President to not come prepared with any concrete proposals.
According to Ramsaroop, it is not as if the President was told the day before that he would have to make another speech at a business forum.
β€œAll we heard was the same tired rhetoric from President Granger… The man hadn’t even got into the meat of his speech before parrot fashion regurgitating meaningless discredited catch phrases like β€˜a good life’,”
Ramsaroop expressed, adding, β€œThe Private Sector wanted to hear what are the solutions, what are the policies that your Government intends to pursue to ensure the investment climate remains attractive.”
The business people are worried about the rampant lawlessness, robberies, and seemingly endless spate of murders which seem to be hallmarks of this Government, and which have significantly contributed to the rapid decline in the levels of foreign direct investment.
Ramsaroop observed that while the President speaks glowingly that Government has been working to create an enabling environment, this is far from reality, as it is not being felt by the business community.
He said the President’s talk of courting investors β€œdoes not mean anything substantive to the business community, since none of the persons being courted to invest in Guyana have been coming.”
Telling this publication that the President has demonstrated clearly that he is out of ideas, Ramsaroop said, β€œImagine, in 2017, the President comes to a Business Summit organised by the Private Sector to hear about plans for the future β€” a future with an oil and gas industry β€” and he tells us instead about public administration, something he was elected to manage.”
The Opposition advisor has since predicted that the business community will react negatively to the utterances of the President, since his vision guides investment strategies. He told this publication, β€œThe President cannot himself be creating a hostile environment and then go to the business community and chastise them.”
Ramsaroop maintains that the President has in fact wasted a golden opportunity to help shape a better future for Guyana.

FM

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