Friday, August 8, 2008

The tax laws cannot be applied retroactively

The tax laws cannot be applied retroactively

Posted By Administrator On August 7, 2008 @ 5:06 am In Letters | 3 Comments

- Stabroek News - -

Dear Editor,

Your Sunday Business columnist Mr Christopher Ram has provided an invaluable public service through his analysis of the divestment of the Sanata complex and the accompanying investment concessions offered to the investor. From what has been revelaed by Mr Ram, it can be concluded that the property of the people of Guyana has been taken and handed to a private investor through a process that was less than transparent.

To add insult to injury, agreements were signed granting the companies involved tax holidays which were in contravention of the existing laws. A corollary observation is that there seems to be uncertainty as to whether local investors can enjoy similar concessions. The laws of the country have since been amended to regularize the concessions but it must be noted that tax laws cannot be retroactively applied and therefore the agreements signed before the tax laws were amended are invalid. I hope that the opposition which recognizes this will challenge the legality of any tax holiday granted under the agreements signed.

I was surprised that Mr Ram in his analysis omitted to consider whether any due diligence was conducted on Queen’s Atlantic Investments. Before any deal is inked between the government and any investor, the government should examine the financial records of that company to determine the track record of that investor. If, for example, that investor has not been showing a profit for years, then caution needs to be exercised. No tax concessions should be offered to companies which have not been showing profits since it would amount to taxpayers foregoing taxes in order to support an investor which has been in the red. I am sure that as an accountant, Mr Ram can offer his insights as to what degree concessions should be offered to loss-making or non profit-earning entities.

Yours faithfully,
Salman Safee

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