GT&T records $9B profit

Dec 17, 2008 News

…pays $1.2B in advisory fees to parent company

Guyana Telephone and Telegraph Company Limited has announced that it had made $9 billion profit in the last operating year 2007/2008.
But, according to a source, the GT&T accounts reflect a few entries that cry out for explanation.
For example, $1.2B is entered as being paid directly to their parent company ATN as advisory fees, an expense on which, since it becomes part of the expenses of the company, it is not required to pay taxes.
The source said that $1.2B a year is $100 million a month, and questions are being asked as to what exactly is ATN advising GT&T on that would cost $100 million a month?
And the Guyana Revenue Authority has announced that it had lost revenue due to GT&T not collecting all overseas-call revenue, due to the operation of the Internet cafés’ cheap computerised overseas calling.
The Guyana Revenue Authority said that it will allow GT&T to block all such cheap overseas calls so that they (the Revenue Authority and GT&T) can make more money from the expensive GT&T overseas rates.
However, this newspaper understands that neither the Revenue Authority nor GT&T may have any authority whatsoever in this matter.
However according to a source this responsibility rests with the minister responsible for Telecommunications, and if the Revenue Authority would like to examine the tax payments of the internet providers and the internet cafés they are welcome to do so.
But the Revenue Authority cannot under any law in Guyana rule that internet call providers must stop using their computers for the purpose of long-distance calling.
But according to a report on the telephone company, the GRA is to be blamed for some of the shortfall.
According to an observer the GRA is too preoccupied with the small businessmen and individuals who are sitting ducks for taxation in the country, and does not have the trained staff needed to investigate the really big fishes.
As a result billions of dollars a year are probably slipping though the tax net here in Guyana, and this puts extra pressure on the small man to meet the operating costs of the nation.
Guyana’s overseas telephone rates are among the highest in the world.
Guyanese are currently paying 50 US cents per minute for overseas calls and the GT&T is collecting $10B a year, or approximately half of their total income, from the overseas calls which Guyanese are making.
Putting the telecommunications company in a true context, the observer noted that in 2007 the total turnover of Guyana Power and Light was $20.2 billion, which represents the total cost to generate and supply electricity to every house which can receive electricity in the country, including the astronomical cost of fuel.
The Guyana Telephone and Telegraph Company’s total income was $21 billion in the last accounting period.
The observer questioned how can any company operating in a nation as poor as Guyana make such a large turnover and profits?

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