THE PRESIDENT, TAXATION AND
The Presidency of Guyana is not usually associated with taxation. In
the days of old when we had governors their official emoluments were
exempt from tax in the colony. Of course, in the obvious absence of a
Double Taxation Agreement between the Mother Country and therefore the
child, the emoluments were taxed in the UK of which the Governor was a
As we moved to independence with a Governor General the privilege
followed the constitutional change and this was adopted for the
Executive Presidency as well. The first holder of this position was of
course Mr. Forbes Burnham who was not prepared to take the job on terms
any less favourable than those available to his predecessors and perhaps
could not bear the thought of submitting himself, via tax returns, to
lesser subjects. This provision was not among the changes to the
presidency passed recently in Guyana. Leaders in the UK, including the
Queen, enjoy no such tax exemption and are liable to tax like any other
The recent amendment seeks to establish a residency requirement on
presidential candidates. It provides that in addition to being a citizen
of Guyana and a Guyanese by birth or percentage, the person must have
been continuously resident in Guyana for at least seven years prior to
the date of nomination.
Absence from Guyana to seek medical attention, or studying at a
University for not more than four years or in the employment of the
Government of Guyana is disregarded for the purpose of the
qualification. In other words, the period would be counted as being part
of the “continuous residence”. Mr. Asgar Ally, in an interview on
Plain Talk to be broadcast at 12.30pm today on Channel 6, expressed the
view that residence abroad by a political leader in gainful employment
(which does not come easily to him in Guyana) should not count as a
break in residence.
In addition to the political arguments, including accusations about
creating second class citizens, there has also been some interesting
technical discussion in the press about the interpretation of the
provision. At some point, no doubt, someone will want to approach the
Courts which bear responsibility for interpretation of all laws.
One source which may be sought for guidance is the Guyana Citizenship
Act Cap. 14:01 which, in setting out the qualifications of a Common
Citizen to be registered as a citizen of Guyana, requires that that
person be “ordinarily resident” in Guyana.
According to a Stabroek News article of January 6 2001, legal sources
have suggested that the Court definition of “ordinarily resident”
will be used in the interpretation. Business Page would not dare to
question, yet alone challenge, legal sources but it would be interesting
to see whether the courts in Guyana regard as similar “ordinary
residence” and “continuous residence” - two issues that are
extremely common in tax cases. Certainly the courts in other
jurisdictions have not taken such an emphatic position.
We now turn our attention to this issue with reference to taxation
The Importance of Being Resident
Residence in taxation is of great importance because this often
determines the taxability of income and assets. As a general rule, a
resident is taxable on income derived from all sources, i.e. from Guyana
and abroad, except that in the case of earned income arising outside of
Guyana only the amount remitted to Guyana is taxable in Guyana.
On the other hand, “any person who is in Guyana for some temporary
purpose only and not with intent to establish his residence therein and
who has not actually resided in Guyana” for a period of up to six
months is only liable to tax on income arising in Guyana. Taxability of
his other income would normally be guided by the tax laws of the country
of which he is resident.
There are two limbs to the definition of residence - a) Either
permanent, or an intention to take up permanent residence, or b)
Resident in Guyana for more than 183 days which is a more practical,
“Resident” is also defined in tax treaties to which the country
is a party. The definition may not be identical to those in the national
tax laws. For example, “resident” in the Caricom Double Taxation
Treaty is defined as “any person who under the law of that State is
liable to tax therein by reason of that person's domicile, residence,
place of management or any other criterion of a similar nature”.
As the Courts like to say, residence is a question of fact. There is
no legal definition of residence and the dictionary definition “to
dwell permanently, or for a considerable time, to have one’s settled
or usual abode, to live in particular place” is quoted in just about
every tax case and textbook.
Usually there is no difficulty in determining where a person resides
(i.e. the tax jurisdiction). Once that is ascertained, he is no less
resident there because he leaves it from time to time for business or
pleasure. English law, as does the Guyana Act, refer to “ordinarily
resident” which Viscount Cave in the Leverne Case remarked “ordinary
residence connotes residence in a place with some degree of continuity
and apart from accidental and temporary absences”. It has been stated
that “ordinary residence” connotes some habit of life and is to be
contrasted with occasional or temporary residence.
It is not necessary that a person should reside in any particular
structure and a nomad wandering within the confines of one country
resides in that country. An American citizen who lived for twenty years
on a yacht anchored within a few yards of English shore was held to be
residing in the UK. The cases appear to indicate that if a person
maintains a home in a country, although he may be absent there from, or
if, on the facts, he spends part of the year in that country as part of
his regular order of life and not merely in the course of travel, he
will he held to be resident there.
Another English concept, copied perhaps a little loosely in our Act,
is that of domicile. I say loosely because it is difficult to see the
relevance in which it is applied under the other provisions of the Act.
It is well established that a person can be resident in two or more
places but a person can only have one domicile. Domicile is distinct
from residence and is the country in which a person has or is deemed to
have his permanent home. It is the place in which he intends to return
to live permanently and pass his final days.
Resident or Ordinarily Resident
The difficulties involved in ascertaining whether a person is
resident or ordinarily resident in a country in certain circumstances
are well brought out in the judgment of Viscount Sumner in Levene v.
I.R.C - “the words ‘resident in the United Kingdom,’ ‘ordinarily
or otherwise,’ and the words ‘leaving the United Kingdom for the
purpose only of occasional residence abroad,’ simple as they look,
guide the subject remarkably little as to the limits within which he
must pay and beyond which he is free. This is more likely to be a
subject of grievance and to provoke a sense of injustice when, as now is
the case, the facility of communications, the fluid and restless
character of social habits, and the pressure of taxation have made these
intricate and doubtful questions of residence important and urgent in a
manner undreamt of by Mr. Pitt, Mr. Addington or even Sir Robert Peel.
The legislature has, however, left the language of the Acts
substantially as it was in their days, nor can I confidently say that
the decided cases have always illuminated matters. …. The way of
taxpayers is hard and the Legislature does not go out of its way to make
it any easier.”
The Australian Situation
The Australian Act has some additional statutory tests set out in its
definition section. The Board of Review in that country pointed out that
the additional tests must be seen as enlarging and not restricting the
definition of resident.
The Australia laws which ours in Guyana reflect, provide for the
following additional statutory tests: ü A person’s domicile which
could be of origin which English law attributes to each individual at
birth, domicile of choice or domicile by operation of law. Domicile of
choice may be acquired by marriage and migration. A person’s domicile
is the place which by law is considered to be his permanent home or
place of abode. ü Permanent place of abode was referred to by Lord
Campbell in R v. Hammond where he said: “A man’s residence, where he
lives with his family and sleeps at night, is always his place of abode
in the full sense of that expression”.
Under the second statutory test a person is deemed a resident if he
has actually been in Australia, continuously during more than one half
of the year. This is also the case in Guyana.
The third statutory test would capture a contributor to a super-annuation
fund under that country’s Super-Annuation Act.
As a practical matter the Guyana Court may use the acid test of the
income and property tax returns. It would be hard for a person to say he
has resided continuously in the country for seven years and has not
filed tax returns. While filing of returns, or more accurately, the
filing of correct tax returns, does not seem in Guyana to disqualify
persons from high office or influential positions, a presidential
aspirant must surely have demonstrated by his compliance, a knowledge
and his commitment to the laws of the land.
There seems to be no real basis for some of the sinister motives
being attributed by some of the measure’s critics. Now that the
provision has been enacted it is up to the Courts to interpret it.
Different judges may take different approaches and particularly on
social and political issues may be more liberal than they otherwise
might be. Whether for example they should consider contractual
employment outside of Guyana to earn a living as a break in continuity,
as they perhaps should, only time will tell. More importantly, whether
our political culture, which is considered by many to be a hindrance to
economic progress, will change, is the real issue.