GRA to appeal court ruling on ‘source of funding’ for duty-free vehicle

See full statement from the Guyana Revenue Authority: 

Georgetown, GRA, December 12, 2024: Note is taken of the misconceptions and miscommunication in various sections of the media surrounding the Chief Justice’s decision in a matter concerning the source of funding for tax exemptions on a duty-free vehicle for a re-migrant from the United States of America.

While GRA is respectful of and will abide with the ruling of the Honorable Chief Justice, the Authority wishes to clarify its actions in keeping with the intent of the measures surrounding imports of high-end luxury vehicles by some re-migrants, and the abuse to the concession by some unscrupulous persons who may have been granted such a status by the Ministry of Foreign Affairs.

In keeping with policy, re-migrants are allowed a vehicle for their own use, subject to various conditions stipulated in the law. This concession depending on its “cc of the vehicle” allows re-migrants to pay significantly reduced taxes on vehicle imports, i.e., 10%, 20%, or 30% excise tax, depending on its engine capacity. For example, a normal taxpayer importing or buying an unlimited engine size, high-end vehicles usually pay in excess of $44 million in taxes, versus a maximum of $6M that a purported re-migrant would incur for the same vehicle.

This has allowed for unscrupulous person(s), including some auto dealers, seeking to utilize this system, by enticing potential re-migrants for monetary gain, to travel to Guyana, apply for the re-migrant status and a high-end vehicle, then leave the jurisdiction. More alarming is that many of the applicants have little or no financial means, nor a bank account, are not even registered, nor filed tax returns in their country of origin, or sometimes do not even possess a driver’s licence in the foreign jurisdiction. When their documents are submitted and analyzed, they often show little or no funds for years, but prior to or after the receipt of the approval, large and sudden cash injections into their just opened bank account, local or foreign, and from unknown persons and benefactors, who are nowhere to be found or refuse collaboration, of the deposit (as was in this case), all with the intention of facilitating the purchase of high-end vehicles. The vehicles are then utilized or purchased by ineligible persons, through the process of powers of Attorney, or possession, resulting in tens of millions revenue losses to the State.

This practice is becoming so prevalent that the GRA has even seen employees of certain treaty- exempt organisations and even public servants being involved in the said activity, hence the resort by the Authority to the “he who asserts must prove” principle, by requesting the source(s) of funds used in the acquisition of the said high-end vehicle.The Revenue Authority is aware of, and takes seriously, its roles and responsibilities, as mandated by the various laws of Guyana that it administers. The Authority is also a Supervisory Authority tasked with regulating and ensuring compliance with the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Act, Cap 10:11, another reason/rationale for the “source of funds’ request.

The Authority also has certain tax and information treaties with several jurisdictions and is further obliged as a Supervisory Authority under the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Act, to share such information with its counterparts. The Authority fully intends to do so by the filing of “Suspicious Activity Reports” of these transactions.

The Revenue Authority is in the process of appealing the decision, considering the huge tax implications to the State and its obligations under the various administered Acts. The Authority will also explore all options at its disposal to ensure the system is not abused and to protect the nation’s revenue. Persons who seek to abuse the system with intent to defraud or to aid, assist, abet, counsel, or induce such abuse may be guilty of an offence and liable to fines and/or imprisonment in accordance with relevant sections of the Customs Act Chapter 82:01, the Income Tax Act, Chapter 81:01 and all relevant legislation administered by the Authority.

The Authority again pleads with such persons to desist from such activity, and requests the General Public to report any information on abuse of the system on telephone numbers 227-6060, Extensions 3201, 3204, 3205, 3206, 3211, 3212, or 3408. All information provided will be dealt with strict confidentiality and such persons may be rewarded in accordance with the provisions of the Customs Act, Chapter 82:01.