The Tax Amendment Bill of 2016 was passed this evening. Minister of Finance Winston Jordan said the legislation is aimed at getting rid of the lines that travellers have to join to transact their tax payments at airport booths.
The Minister explained that of the $4000 departure tax, $2500 is a travel tax and $1500 is a security tax for the airport (CJIA).
At the Ogle Airport, only $2500 is paid by travellers as a departure tax. The Bill will amend chapter 56 of the Tax Act and give the Guyana Revenue Authority’s (GRA) Commissioner the power to appoint agents to collect and remit travel taxes. As a result, the International Air Transport Agency (IATA) has been identified to receive their payments at a 1.5% commission rate, the House was informed.
The departure tax will now be included in airline ticket prices, as one advantage, the Minister explained. He added that in addition to saving time, a collection arrangement that is consistent with international best practices will now be in place. Personnel can also be utilised in other key areas instead of waiting in a booth for flights to arrive, the Minister further added.
Minister Jordan acknowledged that there were some risks, hence the GRA will put in place “strict debt control arrangements” to ensure collected monies are remitted in a timely manner.
Airlines have been consulted and are ready to go ahead with the new arrangements, Minister Jordan told the House.
Opposition Member of Parliament Gillian Burton- Persaud stated that any amendment must be holistic and not partial. She took issue with the current inability to make payments with credit or debit cards.
Opposition Chief Whip, Gail Teixeira also questioned the Bill saying that there is a lot of confusion over the Travel Tax which is not actually a tax but a travel voucher payment. She gave a projection that more than $2.3B will be earned but questioned why IATA will be permitted to earn more than $10M in fees, at its 1.5% commission rate. The Bill, she added, will not permit collection of the tax from overseas buyers or those who purchase tickets via the internet. Teixeira said it needs further amendment to cater for tickets purchased overseas. She also suggested that the Opposition was willing to work with Government, to craft a better piece of legislation.
Rebutting the arguments, by the Opposition, Minister Jordan reminded that the Bill was dealing only with the collection of taxes and easing the lines faced by travellers. He explained that the Opposition was only interested in scoring cheap political points. He vouched for the integrity of the Bill, which he pointed out was drafted by a Senior Counsel who assured that it was sound in law.
The GRA is having difficulty in collecting some $100M owed in Travel Taxes, from an airline that the Minister declined to name, and the amendment also will ensure that Government is better legally empowered to garner these funds.
The consecutive legislation, Number 35 of 2016, Travel Tax Voucher (amendment) Bill 2016 further strengthened the powers of the GRA’s Commissioner General to collect owed debts from airlines. The GRA head will also be able to impose a bond, on errant airlines, which will be forfeited if owed taxes collected from travellers are not paid.
The Bills were then each read for a second and third time before being approved by the National Assembly.