Finance Ministry denies having tax records

VAT on private education

…distances self from Roopnaraine’s comments

The Finance Ministry has distanced itself from comments made by Education Minister, Dr Rupert Roopnaraine about the tax records of private schools, noting that the subject Minister could not have accessed such from the Finance Ministry.
In fact, the Ministry said it did not have any records of any such taxpayers in its system.
In a release to the media on Monday, the Finance Ministry, referring to an article carried in Guyana Times, said it did not have any such information on hand. The Ministry explained that during its efforts to broaden the tax base, in the context of reducing the Value Added Tax (VAT) rate and providing relief in other areas, it had, during the Budget 2017 exercise, required data on various sectors, activities and institutions, including private schools.
“The data in respect of the private schools were limited to the number of them registered in the system and their earnings. The clear intent was to examine the amount of additional revenue that could be garnered from the imposition of the VAT on this source,” the Ministry said in a statement.
It continued, “The Ministry of Finance wishes to reassure citizens that the confidentiality and integrity of their tax information are zealously guarded by the Guyana Revenue Authority, unlike a period not so long ago when taxpayers’ information was being shared with individuals associated with the Opposition party.”
Last Friday, during the consultation on VAT on private education between Government and stakeholders, Accountant and Attorney-at-law Christopher Ram had said that it was unprincipled for the GRA to be sharing information on tax records to anyone, whether to private or Government. He was in fact responding to remarks made by the Education Minister, who relayed at the very consultation, that information at the Finance Ministry showed that some private schools were not up-to-date with their taxes.

“The records from the Ministry of Finance demonstrate that the schools are able to absorb the VAT. Of the private schools that are operating in Guyana, 57 per cent of them are currently registered with the GRA,” Roopnaraine said, before providing more statistics on the taxation status of private institutions in the country.
But Ram challenged the Minister’s presentation and contended that neither he nor any Government official should be privy to tax records of taxpayers.
“I’m not aware that the Ministry of Finance is in any way a regulator of schools in Guyana and the situation was compounded when he said the Government has information on the schools that are not paying taxes. That’s a very serious statement to make, only the GRA has that information and the GRA and its officers are under a statutory duty of secrecy and confidentiality when it comes to information on any taxpayer,” he stated.

Ram further told this publication the following day during a telephone interview that he found the statement “disturbing” and it would be best for the Minister to “clarify what he meant”.
“I think it’s in the interest of the integrity of the GRA that that statement be clarified because the GRA has a rule that it ought not to be giving out information on taxpayers,” he posited.
The Education Minister had also disclosed that 10 per cent of private institutions were registered as non-profit organisations, and 14 per cent as profit-making entities.
He also revealed that most private schools make over $300,000 in tuition fees per year per person, depending on the level of studies.
Dr Roopnaraine said the revenues generated by the top private schools exceeded $2 billion annually.
According to the Education Minister, the estimate does not include extra charges by the institutions for additional services.
He further announced that there was a high level of non-compliance of the timely submission of the required income, property and corporation returns and the payment of taxes.
He said in some cases, teachers were treated as contract employees and employers were not deducting the appropriate NIS and PAYE from their salaries.
Dr Roopnaraine said too that there were incidents of under declaration and inflated expenditure so as to avoid paying taxes. “Payments are made to individuals other than institutions to facilitate these under declarations,” he noted.
In this regard, the Minister had argued that “it is clear” that private institutions could absorb VAT without passing it on to the students.