Hello Guyana! I am Fenrir. Today we are tackling a topic that makes grown ups nervous, but it is actually super simple if you know the rules. We are talking about Taxes!Hi everyone! I am Aoede. I want to show you exactly where your money goes and how it actually helps you live a better life.Hello! I am Leda. I am going to explain the forms you need to fill out so you stay out of trouble with the GRA.And I am Charon! I am looking at the big picture. How taxes work when you sell a house or make a big investment. Let us decode the Guyana Revenue Authority!First up, let us talk about the big one: Personal Income Tax. In Guyana, this works on a system called PAYE, or Pay As You Earn. This means the tax is taken out of your salary before you even see it. But here is the good news: not all of your money is taxed! We have something called an Income Tax Threshold. Think of it as a free allowance. For example, if the government sets the threshold at one hundred thousand dollars a month, and you earn ninety thousand dollars, you pay zero income tax. Nothing! But, if you earn one hundred and fifty thousand dollars, you are taxed on the extra fifty thousand. The standard rate is usually twenty eight percent. So, you would pay twenty eight percent of that extra fifty thousand. It is really important to check your pay slip to make sure your employer is calculating this right. If they take out too much, you are losing money. If they take out too little, you might owe the GRA money at the end of the year!Now, before you get upset about that money leaving your paycheck, let us talk about what it is actually for. Taxes are not just money disappearing into a black hole. They are the membership fee we pay for living in a civilized society. Think about the new four lane highways being built on the East Coast and East Bank. Who pays for the asphalt, the engineers, and the heavy machinery? Taxes. When you or a family member goes to the Georgetown Public Hospital or a local health center, you do not get hit with a massive bill like people do in other countries. That care is funded by taxes. It pays the salary of the teacher who taught you to read. It buys the fire trucks that protect our homes and the police cars that patrol our streets. It even helps subsidize the University of Guyana so tuition stays lower. So, when you pay your tax, you are investing in a safer, smarter, and healthier Guyana for yourself and your neighbors.Now, let us talk about spending. That is where VAT comes in. VAT stands for Value Added Tax. The standard rate in Guyana is fourteen percent. This is a tax on consumption. When you buy a TV, a car, or pay for a fancy dinner, fourteen percent is added to the bill. But here is a pro tip for my smart shoppers: not everything has VAT! The government has a list of items that are Zero Rated or Exempt. These are usually essential items that people need to survive. Things like rice, sugar, flour, cooking oil, fresh fruits, and vegetables usually do not have VAT. Also, educational materials like textbooks and medical services are often exempt. So, when you are budgeting, remember that buying basic goods goes further because you are not paying that extra fourteen percent tax. Always check your receipt!Okay, so you earn money and you spend money. Now you have to report it. This is where the Tax Return comes in. In Guyana, the deadline is almost always April thirtieth. Mark that date on your calendar! Every individual who has a TIN and earns income is supposed to file a return. The form is called the T I N two A or the 7B form if you are an employee. You used to have to fill out a long paper form, but now the GRA has an e Services portal where you can do it online. It is much faster! On this form, you list how much you earned and how much tax you already paid. Sometimes, if you paid too much, you can get a Tax Refund. That is right, the government sends you a cheque! But if you do not file, or if you file late, you get hit with penalties and interest. It is like a fine for being late. Never ignore the deadline!Now let us talk about wealth. If you are successful, you might buy property or stocks. There are special taxes for this. First is the Property Tax. This is not just on your house; it is on your “Net Property.” That means the value of everything you own minus your debts. But don’t worry, there is a high threshold here too. You only pay this if your net property is worth over forty million dollars. For most people starting out, you will not pay this yet. The second big one is Capital Gains Tax. This happens when you sell an asset for a profit. Let us say you buy a piece of land for five million dollars. Ten years later, you sell it for ten million dollars. You made a five million dollar profit. The government charges twenty percent tax on that profit. However, there is a special rule in Guyana: if you hold that asset for more than twenty five years, you do not pay any Capital Gains Tax when you sell it! That is a huge incentive to hold onto your investments for the long term.There is one more tax that catches people off guard. It is called Withholding Tax. This usually applies to savings and investments. If you have a savings account that earns interest, the bank automatically takes out a small percentage of that interest and sends it to the GRA. You do not have to do anything; it happens automatically. The same thing happens if you own stocks in a company like Banks DIH or DDL and they pay you a dividend. A dividend is a share of the company’s profit. Before you get that cheque, a withholding tax is deducted. It is usually around twenty percent for residents. It feels like you are losing money, but remember, you are still making a profit from the interest or dividend!I want to clear up a major confusion: Tax Avoidance versus Tax Evasion. Tax Avoidance is smart. It means using the rules to lower your tax bill legally. For example, claiming your Mortgage Interest Relief allowance is tax avoidance. Buying VAT free goods is tax avoidance. This is good! Tax Evasion is illegal. This is when you lie about how much money you made, or you hide cash under the table so the GRA does not see it. If you get caught evading taxes, you can go to court, pay huge fines, or even go to jail. Always be honest, but be smart about using the allowances the law gives you.Let us look at the Pros and Cons of our tax system.
Pros:
One. It funds our country. Without taxes, we have no roads, no police, and no public schools.
Two. The system tries to be fair by not taxing the very poor (thanks to the threshold).
Three. Exemptions on food help keep the cost of living down for families.
Cons:
One. It can be complicated. Figuring out what is taxable and what is not can give you a headache.
Two. The rates can feel high. Twenty eight percent of your extra income is a big chunk.
Three. Bureaucracy. Sometimes getting your refund or fixing a mistake with the GRA takes a long time.Here are my top tips for staying tax savvy in Guyana.
Tip Number One: Keep every single pay slip. Create a folder physically or on your computer. You will need them if there is ever a dispute.
Tip Number Two: If you have a side hustle, keep track of your expenses. You can deduct the cost of your supplies from your revenue so you only pay tax on the actual profit.
Tip Number Three: Use the GRA website. They have calculators and guides that explain everything in plain English.Taxes are the price we pay for a civilized society. It is your duty as a citizen, but it is also your right to understand where your money is going.So check your receipts for that VAT!File your returns on time!And plan your investments for the long term!Thanks for watching, learners. You are now tax smart!
