Parag threatens legal action as GM&CC unlawfully moves to waive interest on outstanding taxes

Minister of Local Government and Regional Development Sonia Parag has warned the Georgetown Mayor and City Council (GM&CC) about implementing an “unlawful and unauthorised” financial regulation aimed at waiving interest on outstanding rates and taxes owed by property owners within the municipality.

“You are hereby requested to cease and desist this course of action with immediate effect,” the Minister said in a letter to the Mayor Alfred Mentore dated March 26.

The move to implement the waiver was supported by the APNU+AFC-aligned Councillors of the Mayor and City Council.

In the letter, the Minister noted that the Council is not authorised to make such decisions.

While the council claims that its decision is grounded in the municipal and District Councils Act, Cap. 28:01 of the Laws of Guyana, the Minister said that legislation in fact “expressly and exclusively” vests the authority to make financial regulations in the Minister.

“Section 146(1) of the Act is unambiguous. That power lies with the Minister, not with you. Section 146 (1) states: The Minister may make financial regulations for controlling and managing financial business of councils,” she noted.

The legislation goes on to outline the scope including matters related to accounting, borrowing, tendering and the receipt of revenue.

Further, before any such subsidiary legislation can take effect, it must be published in the Official Gazette in accordance with established legal procedure which the Minister authorizes.

The Minister referred to the ruling of the High Court in The Mayor and Councillors of the City of Georgetown v The Attorney General and the Local Government Commission (2022-1HC- DEM-CIV-FDA-294], where it was held that local democratic organs do not enjoy unfettered autonomy under Article 75 of the Constitution and remain bound by the statutory limits set out in the Municipal and District Councils Act and Local Government Commission Act.

If the council moves ahead with its decision, the Minister noted that she is prepared to move ahead with legal action.

“Furthermore, any sums due and owing to the treasury that are unlawfully waived under this measure will be recovered through civil proceedings against you and the responsible parties personally, and the matter will be reported to the Police for appropriate action,” she warned.

In February, the Council advocated for businesspersons to contact the City Mayor to settle outstanding debts. However, Vice President Dr Bharrat Jagdeo had warned against such practices noting that it is a recipe for corruption leading to different persons paying differing sums to the council.

The PPP General Secretary said while it is commendable that the Mayor and City Council wants to collect taxes, they should start with the People’s National Congress (PNC) headquarters which owes over $6B.

“The council budget, they can fund two years of city council’s expenditure by just collecting Congress Place taxes,” he said at his February 27 press conference.