GEORGETOWN, Guyana, Apr. 20, (CMC) – The Guyana Revenue Authority (GRA) has criticised former President, Bharrat Jagdeo, over his criticism of the GRA’s decision to settle a tax case with Demerara Distiller Limited (DDL) that has been before the courts for at least 14 years.
Jagdeo had described the settlement as “scandalous” and said Guyana was losing a significant amount of money as a result of the GRA’s decision.
“It is disappointing that Mr. Jagdeo, who ought to have known better, would seek to expose the business of a taxpayer, as well as attempt to have information on other taxpayers disclosed, even though he knows that these are violations of the oath of secrecy that the GRA is mandated to protect,” the GRA said in a statement.
It said that “it is astonishing that, given the history of violations of taxpayers’ privacy that occurred under his (Jagdeo) government’s stewardship, which Guyanese found repugnant, that he would want to encourage the GRA to continue to operate along those unacceptable lines.”
The GRA defended its decision to settle the matter, noting that it has been before the courts since 2002.
“After almost 14 years with no satisfactory outcome in sight, the GRA exercised its right to settlement, in order to avoid more years of litigation and the consequent loss to the national coffers, as DDL was likely to take the matter to the CCJ. That settlement was calculated based on what the law permits.”
In his weekend statement, Jagdeo said the sum owed by DDL, according to the GRA assessment, was $5.392 billion (One Guyana dollar =US$0.004 cents) from 2001 to 2006 and the settlement means that DDL had use of this money for 15 years.
“If one were to calculate interest on this sum, at a rate of 10 per cent per annum, using only the past 10 years, the liability would amount to GUY$10.6 billion. The GRA assessment of GUY$5.392 billion was based on a formula handed down by the Courts, but yet DDL refused to pay.
“This settlement also writes off all possible liabilities in respect of Excise Tax up to March 9, 2016; so if the same situation obtains with regards to the Excise tax, between 2006 and 2016, then the liabilities would run into tens of billions more”, Jagdeo said.
But in its response, the GRA said it is important to note that Jagdeo’s formula, upon which he based his speculations about the consequences of the negotiated outcome, shows that the government actually gained a profit of GUY$231 million under the scenario he proffered.
“Mr. Jagdeo is fully aware that once a debt owed exceeds one year, its value must be discounted for every year it remains uncollected. During that 15-year period of litigation and based on the interest rate of 10 per cent that he chose, his GUY$5.3 billion would have been worth GUY$1.3 billion to the government after 15 years.”
The GRA said it finds Jagdeo’s objection to its efforts to have an amicable relationship with taxpayers, including those in the business community, troubling, and the tone of his views, present taxpayers as if they are to be enemies of the State.