Earlier today, Guyana Revenue Authority (GRA) Commissioner General, Godfrey Statia revealed that “less than 300 large taxpayers account for 68 percent of total revenues collected by the GRA.”
These 300 taxpayers represent companies and persons who opted to remove themselves from the corporate person into an individual person.
Statia said that notwithstanding this “fact,” small and medium-sized businesses provide employment to the vast majority of the Guyanese workforce.
Statia went on to note that the composition of the private sector in developing countries is different to developed countries. He said that almost half of the private sector activity in developing countries is in the informal sector and is not registered with, or taxed by, government.
He said however that as countries develop, these informal activities typically transition to formal small and medium enterprises.
Statia said that the transition is important because the formal sector generally offers better conditions for workers, greater access to finance higher growth potential and benefit from easier access to government services such as electricity and water.
Further, Statia said that formalization also makes it easier and more cost-effective for governments to register and collect revenues from businesses by bringing them into the tax net thereby widening the tax base.
At a press conference earlier this year, Statia said that GRA raked in some $170B for 2017. He said that the collection of new taxes and going after tax defaulters significantly contributed to this success.
The tax chief said, “We have been targeting persons who owe us and have not been paying, so arrears collection has increased. It is a sizeable amount.”
Statia said that if the top 10,000 taxpayers pay their correct tax, the base would be widened to reduce taxes for the rest of the populace.
“As long as we get those persons doing what they are supposed to be doing, I am sure taxes will be improved,” he said.