And Commissioner General of the GRA, Khurshid Sattaur, said that if there is suspicion of nefarious activity, the GRA could select a taxpayer for auditing.
In time, he said, the TIN system will also allow the GRA to monitor taxpayers' activities in banks, and it will make administering the Property Tax Act easier.
With the advent of the TIN system, all transactions to be done with any government agency or department will require that the person be the holder of that number. He said this would give the GRA access to any transaction that the taxpayer might have engaged in. He said all agencies would be able to transfer the data to the GRA and that data would have tax implications.
Sattaur said the GRA would have to have a good system to ensure that the information could be put to use. He said that for people to get their TIN they would have to be registered with the GRA. "We are widening the net... persons doing business with these government agencies were not required before to have the number, now they are," he said. "We will have information as to all their transactions. This will hopefully give rise to a level of awareness that such data is resident with the GRA."
He said the GRA would be able to verify information submitted in tax returns by using the data that the new system makes available. He said if persons are aware that the GRA is in possession of their personal information they would seek to ensure that their declarations are what they should be. The GRA is to devise a system to use the information to pursue persons who seek to evade payment of their fair share of taxes.
Sattaur said that for this to work, the GRA would bring on board new IT systems to support the new software. He said the system is geared to detect under-reporting of taxes and assets.
According to Sattaur, people with large assets who don't make disclosures will be detected by the system. In order to clamp down on false declarations and the omission of assets and income, the GRA will be using statements from banks and performing net worth analyses to make comparisons.
The GRA collects taxes from businesses and individuals without regard to whether the person or business acquired their gains through illegal means.
An accounting partner is of the view that the use of the net worth analysis could prove instrumental in the fight against money laundering if properly employed.
Rakesh Lachana, one of the partners of Ram and McRae, said in an interview that agencies such as the GRA could look at a company's balance sheet and determine if financial dealings are in line with the stated income. He said the same could be done for an individual who might be filing tax returns on an annual basis.
A month-to-month assessment of the balance sheet could be done to determine whether there are any significant changes. "You have to compare the two to see what movement happened over the year."
Very often, he said, one would find large buildings going up in the city and yet there is no reflection of those funds in the financial statements of the companies or persons involved. In some cases owners claim to have made a cash injection into the business. He said the question to be asked is where this money came from and if this question cannot be satisfactorily answered then this is cause for suspicion.
This is where the GRA's focus must be, he said, in addition to looking out for tax evaders. But he feels the GRA may be of a mind to levy taxes on stated income. Lachana said the GRA could look at the income of the person declared for the year as against their net worth.
Lachana believes that a useful strategy would be for the GRA to look at the balance sheets of ten or 20 of the biggest companies and ask for a list of their suppliers. He said the GRA could then take that information and check it against the reporting of the suppliers. Once there is no money being filtered then the information should correspond. The bulk of money-laundering funds in Guyana come from illegal fuel and drugs, he said.
According to the certified accountant, if the owner of the business did not take a loan from any bank then it is reasonable to have strong suspicions and act on those suspicions.
The TIN is part of a programme called Total Revenue Integrated Processing System (TRIPS) provided through the Crown Agents in the UK. This system enables all government systems to be managed under a single umbrella. The system develops taxpayer profiles with a unique number for all tax and all revenue liabilities, thereby painting a complete picture of all registered taxpayers. In addition to taxpayer identification, TRIPS provides revenue accounting, customs controls, intelligence and risk management, audit and assessment, debt management, management information and e-government.
TRIPS will allow taxpayers and the revenue authority to interact directly via the Internet, allowing taxpayers to register for taxes, submit declarations and payments electronically, access public information and enquire on the status of accounts, or the progress of goods through Customs.
The software will be able to detect instances of money being 'splashed' in the putting up or the acquisition of large properties. It is designed to prompt the GRA when such telling information surfaces.
New money laundering legislation is to be brought to the National Assembly some time after the restart of Parliament. The new legislation would seek to have greater control over money transfer operations as it integrates the additional nine recommendations against terrorist financing. The law will mandate money transfer companies to get originator information.
The bringing of this new legislation into effect will be the force giving 'teeth' to the Financial Intelligence Unit (FIU) which had been set up to monitor and apprehend those businesses and individuals involved in filtering the proceeds of crime into the economy. The FIU has been largely dormant since it came into being.
The Bank of Guyana, the Office of the Commissioner of Insurance and the GRA are some of the reporting agencies in the fight against money laundering. These agencies would have to sound the alarm in the event that suspicious activity is detected.
The recommendations in relation to the reporting of suspicious transactions and compliance state that if a financial institution suspects or has reasonable grounds to suspect that funds are the proceeds of a criminal activity, or are related to terrorist financing, it should be required, directly by law or regulation, to report promptly its suspicions to the FIU.
They state too that financial institutions, their directors, officers and employees should be protected by legal provisions from criminal and civil liability for breach of any restriction on disclosure of information imposed by contract or by any legislative, regulatory or administrative provision, if they report their suspicions in good faith to the FIU, even if they did not know precisely what the underlying criminal activity was, and regardless of whether illegal activity actually occurred. According to the recommendations, these persons should be prohibited by law from disclosing the fact that a suspicious transaction report or related information is being reported to the FIU.
Quelle/Source: Stabroek News, 11.06.2006
