Employers in Guyana have several tax responsibilities. One of these is the withholding of Pay-As-You-Earn (PAYE) or income tax from their employees' salaries or wages. These deductions must be remitted to the Guyana Revenue Authority (GRA) on a monthly basis. The tax calculation uses a progressive tax rate system, and PAYE needs to be deducted and remitted to the GRA by the 14th day of the following month.

National Insurance Scheme (NIS) Contributions

Employers are also required to make contributions to the National Insurance Scheme (NIS) on behalf of their employees. The employer contribution rate to NIS is 8.4% of the employee's gross monthly earnings, up to a contribution ceiling. NIS contributions must be paid by the 15th day of the following month.

Other Potential Contributions

There may be other obligations for employers, such as contributing to employee pension plans, either privately arranged or government-mandated. Some fringe benefits provided by employers may also be subject to income tax.

Reporting and Filing

Employers must file returns and make payments to the GRA for both PAYE and NIS contributions, typically on a monthly basis. It's essential to consult a tax professional for updates on exact filing procedures.

Important Considerations

There are penalties for late payment or non-payment of employer's contributions. Therefore, employers are advised to consult tax advisors in Guyana to ensure full understanding and compliance with the tax regulations.

In Guyana, the income tax system is progressive, meaning that higher income earners are taxed at higher rates.

PAYE Withholding

Employees' income tax, also known as Pay-As-You-Earn (PAYE), is typically deducted on a monthly basis.

National Insurance Scheme Contributions

Employees in Guyana are required to contribute to the National Insurance Scheme (NIS). The employee NIS contribution rate is 5.6% of gross monthly earnings, up to a specified ceiling.

Allowances and Deductions

Employees are entitled to a personal allowance, currently set at GYD 780,000 per year. This portion of income is free from tax. Employees might also be eligible for further tax deductions, such as contributions to approved pension schemes.

Calculation and Reporting

Employers must calculate employee income tax deductions (PAYE) and NIS contributions, withhold them from salaries, and report them to the Guyana Revenue Authority (GRA). Reporting and payments to the GRA are generally due by the 14th day of the following month.

Seeking Professional Advice

Tax regulations are subject to change. Employees should consult tax professionals in Guyana for the most updated information and to ensure accurate tax calculations.

Guyana has had a Value-Added Tax (VAT) in place since 2007. The standard VAT rate in Guyana is 14%. Businesses with an annual turnover exceeding GYD $15 million must register for VAT.

VAT on Services

In general, services supplied within Guyana by a VAT-registered business are subject to VAT at the standard rate. Some key services are specifically exempt from VAT, including financial services, medical and health services, educational services, and public transportation.

VAT Zero-Rating

Certain services, while technically taxable, have a VAT rate of 0%. The most important category for services is exports. Services exported outside of Guyana are zero-rated.

VAT Invoicing

VAT-registered businesses providing services must issue tax invoices with these details:

• Supplier's name, address, and VAT registration number
• Customer's name and address (if a business)
• Invoice date and number
• Description of the services
• Taxable amount
• VAT rate and amount charged

Filing VAT Returns and Payments

VAT returns must be filed monthly by the 21st of the following month. Businesses may be eligible for quarterly filing. VAT payments are due with the return filing.

Record Keeping

VAT-registered businesses must keep records of all their transactions (both sales and purchases) to support VAT filings. These records should be kept for at least 7 years.

Tax incentives are a crucial tool for stimulating economic growth and development. They come in various forms, each designed to encourage specific business activities or sectors. Here are some of the types of tax incentives:

Customs Duties and VAT Exemptions

Businesses can benefit from an exemption from paying customs duties and Value-Added Tax (VAT) on imported machinery, equipment, and raw materials for manufacturing and small businesses.

Loss Carryforward

This incentive allows businesses to carry forward losses indefinitely to offset against future taxable profits.

Accelerated Depreciation

Companies can enjoy faster depreciation rates on plant and equipment, which reduces taxable income in the initial years.

Repatriation of Funds

There are no restrictions on the repatriation of capital, profits, and dividends for foreign businesses.

Scientific Research Deductions

Tax deductions are offered for expenses on scientific research that benefits the country's development.

Initial and Annual Allowances

Initial allowances are granted on capital expenditure, further decreasing the taxable base, along with annual wear and tear allowances.

Export Allowances

Companies exporting manufactured, processed, or agricultural products (with some exceptions) get export allowances, which are deductions from chargeable profits based on export sales percentage.

Tax Holidays

Tax holidays, or full exemption from corporation tax, are granted for new economic activities deemed developmental and risk-bearing in specified sectors. Examples of qualifying sectors include Non-Traditional Agriculture and Agro-Processing, Information and Communication Technology, Petroleum Exploration, Extraction, and Refining, Mineral Exploration, Extraction, and Refining, Tourist Facilities, Value-Added Wood Processing, and Biotechnology. Tax holidays usually last up to 5-10 years and can be extended under exceptional circumstances.