Following a series of investigations, the Guyana Revenue Authority (GRA) has uncovered massive abuses of its systems by SOL Guyana Inc. and other major importers. According to a document seen by Guyana Standard moments ago, GRA explained that it was the practice of the entity for several years, to allow the major oil companies to import and enter tax-exempted fuel for various businesses who benefitted from partial or full exemptions on fuel.
In doing so, GRA explained that the oil companies are required and expected to, inter alia, deliver the full exempted quantities imported and entered to all such beneficiaries, which the beneficiaries are expected to utilise for the intended purposes.
In 2017, the Law Enforcement and Investigation Division (LEID) of the revenue authority was instructed by its Commissioner General, Godfrey Statia to make visits to the beneficiaries’ places of business to ensure that the fuel was utilized for the purposes intended.
In doing so, and during the reconciliation process, it was discovered that the import and clearing of fuel through the Permission For Immediate Delivery (PID) system was flawed since oil importers were utilising exemption letters to clear PID’s without regard to whom the fuel was destined for, i.e., whether the fuel was fully exempted, partially exempted, or subjected to the tax.
One blatant case it cited of abuse was between SOL and BOSAI. For the period January 1 to September 30, 2020, Guyana Standard understands that a total quantity of 34,554,080 litres of gas oil was imported and duly entered by Sol Guyana Inc. using both Bosai companies tax exemption letters with references LT02-2020 406 and LT02-2020 417;
Of this quantity, certified records submitted by SOL Guyana Inc. and both Bosai companies revealed that only the accumulated quantity of 20,691,379 litres was delivered to the beneficiaries. This meant that the balance of 13,862,701 litres should have remained in SOL’s possession.
To this effect and based on the incontrovertible evidence obtained, the Revenue Authority demanded the forgone Excise Tax in the sum of six hundred and six million, nine hundred and seventy-eight thousand, three hundred and sixty-three dollars ($606,978,363) on the 13,862,701 litres of Gas Oil which was imported, duly entered free of Excise Tax and was not delivered to both Bosai companies to be utilized for the intended purpose.
In an email dated November 27, 2020, GRA said Sol Guyana Inc. accepted the liability. However, it further alleged that in past periods, notably during 2018-2019 the company supplied in excess of 24 million litres of duty paid diesel at duty free price to both Bosai companies without exemption letters.
GRA was keen to note however that the alleged quantity (24M litres) when reconciled was found to be only 20.3M litres, “clear evidence that Sol Inc., does not keep adequate records of acquittals.”
Guyana Standard understands that GRA officers are currently examining Bosai Exemption records to see whether the company acquired fuel from other importers in 2018 and 2019 since they were in receipt of Exemptions during the period claimed.
It should be noted that GRA is desirous of having SOL prosecuted, along with ensuring that the State recovers duties and interests applicable based on the abuses.