Title: IRC and ICSA Crack Down on Tax Evasion Schemes Involving Foreign Workers in Guinea

Project Masta: A New Initiative against Tax Evasion

The Internal Revenue Commission (IRC) in Guinea has launched a new operation, called “Project Masta,” to address tax evasion schemes involving foreign workers and local employer groups.

Discovering Tax Evasion Schemes

During the initial phase of Project Masta, some inconsistencies in the visa sponsorship and employment of foreign workers came to light:

• Work visa sponsorship vs. Employment: Foreign employees were being sponsored for work visas by one company but eventually working for multiple entities.
• Payment methods: These workers were being paid through foreign bank accounts, reducing their local compensation and making it easier to evade Guinean taxes.

Uncovering the Use of Dual Contracts and Business Visas

Project Masta also disclosed the following issues:

• Dual contracts: Foreign workers used dual contracts – local and external – which often concealed their true employment situation.
• Business visas: In some instances, foreign workers used business visas to work in inline positions as employees, instead of adhering to the tax regulations.

The Impact of a Major Mining Company Penalty

This joint operation follows recent penalties imposed on a major mining company for tax evasion practices, intensifying the focus on combating revenue leakages and bridging the tax gap.

Collaborative Measures and Regulations to Abide By

Commissioner General Sam Koim from the Independent Consumer and Small Business Protection Agency (ICSA) and Acting Chief Migration Officer Wellington Navasivu discussed intensifying their collaborative efforts. They plan to build upon their existing Memorandum of Understanding:

The type of visa has substantial tax implications. IRC is initiating several projects to minimize revenue leakages and bridge the tax gap."

• Commissioner General Sam Koim

Employer Responsibilities

Employers must ensure that all workers, including those on business visas, abide by Guinean tax and immigration laws:

• Legal authorization: Ensure all workers have necessary visas and legal authorization to work.
• Compliance: Rigorously comply with work permit conditions.

Employers must ensure that all workers, including those on business visas, are legally authorized to work under Guinean laws, including tax and immigration laws, and rigorously comply with their work permit conditions."

• Acting CMO Wellington Navasivu

Penalties for Non-Compliance

Failure to comply with these regulations may result in significant penalties:

• Fines
• Deportation
• Additional legal consequences

ICSA and IRC encourage all businesses and individuals to review their employment authorization and tax compliance obligations to avoid potential penalties and legal consequences.

Contacting the Authorities

If you have any queries or concerns regarding these matters, please contact the IRC or consult a qualified tax advisor.