GRA already cashing in from embryonic oil and gas industry – Jordan

Aug 16, 2017 News

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By Abena Rockcliffe-Campbell

The Guyana Revenue Authority (GRA) has already begun to collect revenues from the still

developing oil and gas industry in Guyana.

This fact was highlighted at a recent press conference hosted by Minister of Finance, Winston Jordan at which GRA Commissioner General, Godfrey Statia was present.

At that forum, Jordan said that the GRA and the Ministry of Finance already have a fair idea about the magnitude to which Guyana will be benefitting from its oil and gas industry.

“We have a fair idea what it is we will be getting and it is fairly large,” Jordan asserted.

As the Minister continued to speak on behalf of the Commissioner-General he noted, “Statia is already collecting. He is collecting withholding taxes which are a substantial sum.”

A withholding tax, also called a retention tax, is a government requirement for the payer of an item of income to withhold or deduct tax from the payment, and pay that tax to the government.

Jordan said that the reason the collected withholding taxes recorded a marked increase for the first half of 2017 is because of a developing oil and gas industry.

The Minister said, “He (Statia) is collecting fair amount of money from oil and gas, so there are at least three sources of income (from the oil and gas industry) – withholding taxes, profit oil and royalties, and those are fair amounts.”

The Mid-Year Report indeed reflected a marked increase of withholding taxes.

The report stated, “Withholding tax grew by $865.5 million, or 27.2 percent, mainly due to payments by two companies providing support services to the oil and gas sector, and interest earned on savings accounts at commercial banks. Of the amount collected, almost $191.9 million was arrears.”

GRA, in preparing, for the oil and gas industry, has decided to set up an oil and gas unit. That too is still to come on board. However, the Authority has expressed its commitment to do its best to collect every cent of tax revenue owed to the people of Guyana.

This commitment was recently renewed when GRA defended why only Statia is in procession of the agreement between the Government of Guyana and ExxonMobil.

GRA had confirmed a Kaieteur News article which stated that only the Commissioner-General

of the Authority has real knowledge about the content of the agreement.

Not even managers know what the contract states. GRA said that this is just the way things have to be in order to maintain the confidentiality of the contract.

In a public missive, GRA said that it remains firmly committed to fulfilling its obligations as one of the regulatory bodies for the rapidly emerging oil and gas sector.
The Authority said that part of that commitment involves the imposition of rigid systems to closely monitor companies that are undertaking exploration and extraction of oil offshore in keeping with the contractual agreement between the Guyana Government and such companies, including ExxonMobil.

GRA stated that it is privy to such contractual arrangements.

“However in keeping with the law, this information is confidential. To maintain its confidentiality and avoid leakages, the Commissioner-General will only share such excerpts of the said agreement with relevant officers in the event that their duties require them being privy to such information in the execution of such duties.”

GRA said that its position takes into consideration a number of factors, chief among them, the “sensitivity and confidentiality of the document and the level of caution that had to be imposed as a result of persistent breaches of the Secrecy Oath at the Authority.”

GRA continued, “The recent Kaieteur News article “GRA officials ‘sailing’ on EXXON contract” is the latest such breach of confidentiality and further evidence of the need to exercise such diligence.”

Kaieteur News was reliably informed that even senior operatives of GRA are at a loss when it comes to the contractual arrangement.

This newspaper reported that the situation leaves the tax authority facing a precarious situation. It is preparing to collect revenues from the looming oil industry, but has no idea of how the revenue will flow.

Key officials of GRA were recently embarrassed in a meeting the Authority had with ExxonMobil. The officials were essentially sailing. One officer said, “I couldn’t understand the purpose of the meeting, because most of us are not aware of what is going on.”
Employees are contending that Exxon is somehow being given the upper hand when the relevant professionals are not given the opportunity to familiarize themselves with the document.

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