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Local investors in oil and gas sector will get incentives– Go-Invest CEO
Local entrepreneurs who want to invest in the developing oil and gas sector will have access to
Go-Invest CEO, Owen Verwey
concessions and incentives provided for in the laws of Guyana. Giving this assurance was the Chief Executive Officer of the Guyana Office for Investment (Go-Invest), Owen Verwey.
The CEO was at the time responding to a question posed at the Local Content Policy Stakeholder Engagement yesterday at the Marriott Hotel. The event was organised by the Ministry of Natural Resources.
The question was what additional incentives local investors will enjoy if they want to participate in the oil and gas sector.
According to Verwey, the incentives are covered under the Investment Act. Specifically, this is dealt with under Section 36 of the Act which states “Investment priority categories shall be detailed in Priority Lists as set out in Section 2 of the Income Tax (in Aid of Industry) Act.”
Verwey said that the petrochemical sector is a special section that covers investment incentives in that sector. “To a large extent it may be covered under pioneering activities that could be eligible for the best of the incentives which is a corporate income tax holiday but below that, the incentives are the exemptions on duties and taxes on the importation of capital equipment and machinery to be used in the production of whatever activities it is.”
Further, the CEO said that incentives vary for those operations that might be located in the economically and socially challenged locations of Guyana. He said that these areas have been identified to be Regions One, Seven, Eight, Nine and Ten.00
The Income Tax (in Aid of Industry) Act, Section 2 gives the Minister the power to grant an exemption from corporation tax with respect to income from new economic activity of a developmental and risk-bearing and qualifying under a number of circumstances.
These circumstances include the creation of employment in the above mentioned administrative regions or creating employment in a number of fields including the petroleum exploration, extraction and refining sector.
As it relates to additional incentives, Verwey said that accessing incentives would depend on an investor’s downstream activities.
“If your downstream activities are in manufacturing, most of what I said earlier covers that. If it’s pioneering then you will be entitled to a lot of those items. If it’s the case of importing and supplying, then we get into a very tricky area whereby you are talking about the importing and supplying for the oil and gas industry which everyone else including Exxon might do.”
According to Verwey, Exxon has already received some exemptions. However, he said that these are only limited to capital equipment and machinery that is used directly in the operations of ExxonMobil.
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