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Guyana Announces Tax Amnesty In 2018 Budget

by Mike Godfrey,, Washington

30 November 2017

Guyana's Minister of Finance, Winston Jordan, has announced a tax amnesty and tax cuts in the territory's recent 2018 budget.

Corporate and individual taxpayers who file outstanding returns and pay any tax due on or before June 30, 2018, will have all interest and penalties waived, while taxpayers who file and pay all principal taxes between July 1, 2018, and September 30, 2018, will benefit from a 50 percent reduction in interest and penalties .The amnesty takes effect from January 1, 2018, and runs through to September 30, 2018.

From 2018, companies will be able to file tax returns accompanied by draft management accounts, with audited accounts required to be filed on or before December 31 of the year in which the return falls due.

The requirement to pay two-thirds of disputed tax as a bond before an appeal can be made will be cut to one-third of the tax in dispute, provided this is less than GYD20m. The lodgment of a bond or other acceptable form of guarantee will be accepted for disputes in excess of GYD20m.

VAT will be removed on supplies of all educational services with effect from January 1, 2018, reversing the imposition of VAT in the 2017 Budget, which made services provided by private educational institutions standard rated, and exempted educational supplies that had previously been zero-rated. At the same time, the Guyana Revenue Authority will step up its efforts to ensure educational institutions comply with their tax obligations.

Employers providing day-care services for their employees' children, and businesses providing and constructing facilities for persons with disabilities, will be able to deduct related expenses and capital costs.

The pro-rating of the individual personal allowance of GYD720,000 (USD3,461) for part-time workers will cease in 2018. Currently, if a person works for only six months in an entire year he/she would only be able to claim half of the personal allowance, currently GYD360,000.

The tax-free vacation allowance currently enjoyed by public sector employees will be extended to private sector employees, up to a maximum of one month's base salary, from January 1, 2018. Guyana's Revenue Authority will be scrutinizing the allowance closely to ensure previous abuse of this benefit-in-kind, where employees were being paid large vacation allowances, in lieu of salaries, does not recur.

Old Age Pensions will rise from GYD19,000 to GYD19,500 with effect from January 1, 2018. Public assistance will be increased to GYD8,000.

To boost the forestry sector, importation of pine wood and pine wood products will be restricted from January 1, 2018, and the supply of logs and rough lumber to the sawmilling industry will be made VAT exempt.

Following strong representations at the recent meeting of the Council for Trade and Economic Development, an organ of CARICOM, the Caribbean regional cooperation body, Guyana's request to increase the common external tariff on pine wood and pine wood products, from five percent to 40 percent, has been approved. The new tariff will apply from January 1, 2018, to December 31, 2019.

Gold miners will benefit from new incentives. Tributor's Tax will fall from 20 percent to 10 percent, with effect from January 1, 2018, and the current two percent gross proceeds tax will be replaced with a sliding scale percentage based on the price of gold, starting at two percent on gold priced under USD1,100 per ounce, rising to 3.5 percent for gold priced over USD1,600 per ounce.

To support the housing sector and encourage building of low cost houses, a VAT exemption will be brought in for complete housing units costing up to GYD6.5m, that are built by, or on behalf of, the Central Housing and Planning Authority or any other approved entity.

A range of measures will be brought in to support Guyana's tourism industry, including a cut in import duty on certain vehicles, free vehicle licenses for motor buses and motor vehicles used in certain tourism areas, and the abolition of VAT on vehicles that are less than four years old, which are used to transport more than 21 persons. The flat rate excise tax of GYD6,900 will be replaced with VAT of 14 percent on vehicles four years and older that carry between 22 and 29 passengers.

A final tax measure proposed by the budget is a general tidying up of the VAT Act and its schedules to address errors and omissions that followed the 2017 Budget changes. The proposed amendments are not intended to negatively affect any individual or business.

TAGS: Finance | tax | business | value added tax (VAT) | interest | public sector | employees | budget | corporation tax | education | Guyana | penalties | individual income tax | services | Pensions | Pensions | Tax

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