COVID-19 impacts
Following a clamour of calls from civil society and members of the public, the Guyana Revenue Authority (GRA) has removed Value Added Tax (VAT) on a number of items, a reversal of the Government’s policy. 
According to the GRA in a statement on Tuesday, VAT will not be charged on water and electricity from April 1 to June 30, 2020.
This is to support “businesses and individuals who have been socially and economically disadvantaged by the threat of the coronavirus.”
The authority also announced the “removal of VAT on Domestic Air Travel with effect from April 8, 2020, to June 30, 2020. There is also an extension of the April 30 deadline for the filing of tax returns to June 30, 2020.”
“However, estimated remaining taxes using “management financial statements”, for the Year of Income 2019 (Year of Assessment 2020) must be paid by April 30, 2020.”
When A Partnership for National Unity/Alliance For Change (APNU/AFC) took office in 2015, they inherited a system from the then People’s Progressive Party Government where VAT was not charged on essential items like water and electricity. This was for the very same reason of easing the tax burden on consumers.
Over the course of their term in office, the APNU/AFC Government reduced VAT by a mere two per cent, then spread it on a number of new items including these essential commodities.
This policy was met with determined opposition from sections of society and the People’s Progressive Party (PPP).
While increased tax collection amounts to money for the State coffers, the parliamentary Opposition has long argued that from an economic sense, tax collection without corresponding growth in the economy is a bad combination.
The permanent reversal of these taxes formed a major plank in the party’s political campaign in the lead up to the March 2 General and Regional Elections.
Other measures
GRA also announced that it will expedite the processing of VAT refunds for businesses and Pay As You Earn (PAYE) refunds for employees. It also explained that while its employees are working from home, the Authority continues to provide essential services to taxpayers.
It noted that it is also collecting revenue necessary for services to be provided to the people of Guyana. This comes at a time, however, when many businesses are seeking economic relief and are sending home employees as the cash crunch from COVID hits hard.
In addition, GRA explained that it is also fast-tracking its e-services, including the submission of documents and payments. Among the steps it is taking to protect its employees are rotating working employees on a weekly basis and weekly fumigation.
“The GRA also continues to provide the essential services needed to clear all items, both by air and sea, and also to expedite exports,” the tax body said, adding that these new measures complement the existing ones.
Previous measures
It was previously announced that there will be a waiver of Value-Added Tax (VAT) and duties on medical supplies associated with the testing, prevention and treatment of the disease, and the suspension of a series of licensing transactions until April 30, 2020.
In addition, tax deductions were granted for all donations made by local businesses to staff and health institutions for the treatment of the virus.
GRA had also announced the deferral of advance corporate and individual advance taxes for the year of assessment 2021, which deals with the 2020 year of income, and PAYE for affected businesses until June 30, 2020.
The Private Sector Commission had recently proposed a number of economic relief measures which could be implemented by the caretaker Government to cushion the impact of the coronavirus as the crisis deepens.
A correspondence was sent to Head of the National COVID-19 Task Force, caretaker Prime Minister Moses Nagamootoo, highlighting key areas in which measures can be taken to relieve Guyanese, especially through tax waivers and suspension of financial household commitments.
In the list of noteworthy recommendations made to the caretaker Administration was the removal of mortgage interests and payments during this time, and to immediately raise the threshold to accommodate no taxation for employees earning $65,000 to $100,000 who were sent off the job.
