With effect from January 1, 2022, and in accordance with the Fiscal Enactments (Amendment) Act No. 5 of 2022, Section 13 and 14 of the Income Tax Act Chapter 81:01, which mandates the deduction of Resident Withholding Tax at the rate of two percent (2%), has been repealed and is no longer applicable on contractor’s earnings.

As a consequence thereof, the deductions of two percent (2%) withholding tax must cease immediately on any contractor’s earnings.

Prior to being repealed, Section 39(13) and (14) of the Income Tax Act, Chapter 81:01 provided as follows:

Section 39(13)(a) of the Act, Chapter 81:01 stated that “where any person makes any payment in excess of five hundred thousand dollars ($500,000), either directly or indirectly, to a contractor for the supply of labour or for the hiring of equipment, that person shall deduct tax from the gross amount of that payment, excluding value-added tax, at the rate of two percent”, while,

Section 14 stated that, “For the purpose of subsection (13), “contractor” means any person who is a resident and who has been awarded a contract for providing or supplying independent personal services for reward, other than as an employee.“

Any Withholding Tax previously deducted from contractor’s earnings and remitted to the Guyana Revenue Authority in January and February of 2022 will be considered as part of the Advance Tax payment to the contractor’s account and would be treated as such, thereby reducing the quarterly advance taxes payable by those contractors.

All deductions not yet remitted to the Guyana Revenue Authority should be refunded by the Contractee to the Contractor.

By Order of

Mr. Godfrey Statia
Commissioner General
Guyana Revenue Authority