Through the MCC-funded Guyana Threshold Country Program/ Implementation Plan (GTCP/IP), Nathan Associates helped Guyana improve its climate for business investment and made it possible for the government to lower its fiscal deficit. Guyana has improved its performance on fiscal indicators whether in tax administration, VAT and customs operations, fiscal planning and control, business registration, or expenditure oversight.
Results detailed here have paved the way for other reforms in tax policy, forecasting, and filing, payment, and audit systems; VAT public education; deterrence of tax evasion; tax investigations and risk analysis; and anticorruption. A lower government deficit, a primary indicator of fiscal health for the MCC, is expected after the project’s completion.
Effective Tax and Customs Administration
The project recommended 26 tax system reforms and provided direct assistance for institutional reform and systems improvement. For example, our team helped the Guyana Revenue Authority (GRA) reorganize by business function , institute a training program, and train 600 staff.
The project procured and installed IT to simplify administration, developed an IT management plan, and redesigned the enterprise network. The project also developed a modernization plan for the Customs and Trade Administration, plans for implementing the Revised Kyoto Convention and the SAFE Framework, and helped implement reforms that reduce custom clearance times. Results for 2009 were promising:
- The GRA had instituted 98 percent of 400 job descriptions and about 50 percent of operating procedures recommended by the project.
- Tax revenue as a share of GDP for the three quarters of 2009 was 26 percent of the annual budgeted GDP for 2009. Collection of import duties and excise tax on petroleum products remained strong.
- The stock of outstanding tax arrears was down 86 percent from July 2008.
- Customs revenues for the year to September 2009 totaled G$5.1 billion.
Better VAT Implementation
The project produced a plan for improving VAT administration in 9 areas, and the GRA is now addressing 5 of those areas. As a result, Guyana achieved 85 percent compliance with VAT measures by January 2010 as required by the MCC a big improvement from the initial compliance rate of 68 percent.
Greater Capacity for Tax Policy and Forecasting
To advance capabilities at Guyana’s Ministry of Finance, we created a macroeconomic forecasting model and trained officials from multiple agencies to use the model in planning budgets. We also trained staff to use microsimulation models to analyze customs and VAT, report on tax performance, and analyze and report on administrative effectiveness.
The project established data protocols and system specifications to address database needs and delivered an IT solution to improve access to TRIPS and other databases.
Efficient Expenditure Management
To improve the national procurement system, we simplified and standardized documentation and trained 500 officials well beyond the target of 160 in new procedures; developed a procurement handbook, a tender board manual, evaluation criteria, and 11 standard bidding documents; and upgraded the procurement agency’s website to handle online tendering.
Stronger Parliamentary Fiduciary Oversight
To strengthen the legislature’s oversight capacity, the project upgraded library resources and access to information; digitized a 25-year backlog of historical debates and proceedings as well as Hansard records of Parliamentary proceedings, and trained staff in new roles, methods, and processes.
Faster Business Registration and Incorporation
To improve registration and to develop a one-stop shop integrating the Deeds Registry and Go-Invest, the project linked the databases of the registry, GRA, NIS, and GoInvest; developed web-based interface for registration; drafted legislation to facilitate electronic filing of registration and gazzeting; developed a memorandum of understanding for agencies involved in business registration; and drafted Guyana’s 2009 Investor’s Roadmap.
So far, registration reforms have reduced the number of days to register a business from 44 to 12 well below the target of 30 days.