Revenue Authority, GEA at odds over number of fuel import licence… One Licence being used for multiple operations

Apr 26, 2018 News

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The detaining of a boat last week has brought the spotlight sharply back on the fuel industry.
This week, Commissioner-General, Godfrey Statia, disclosed that there are almost 100 import licences in place, and this is proving to be a major policing challenge for the Guyana Revenue Authority (GRA).
His statements, in response to media questions, would come after a locally-owned fuel ship was found with over 200,000 gallons in the Demerara River. The vessel was not checked and recorded by Customs, GRA investigations found.
It was only after the vessel was boarded that attempts were made to record the entry of the vessel at the nearby Boat House.
GRA is now moving to collect over $36M in taxes owed from the fuel with the captain of the Jubilee likely to be slapped with a massive fine.
GRA has found a number of weaknesses in its systems and is investigating whether the vessel could have also been involved in smuggling in other instances.
The statements of almost 100 import licences also touched a chord with the Guyana Energy Agency (GEA) which polices the fuel trade.
Yesterday, the agency made it clear that the number of licences is definitely not 100.
In fact, according to figures, GEA said that there are 13 Import and Importing Wholesale Licences for fuel; inclusive of diesel, gasoline, kerosene, and aviation fuel.

Additionally, there are 22 Import and Importing Wholesale Licences issued for the importation of either lubricants and/or LPG only; one Export Licence; 14 Wholesale Licences; 113 Retail Licences: Petrol Filling Stations; 464 Retail Licences for LPG, Kerosene and Lubricants; 230 Consumer Installation Licences and 630 Bulk Transportation Carrier Licences.
GEA said in its statement that it publishes annually in the Gazette a list of all licences issued in accordance with the Petroleum and Petroleum Products Regulations.
“These numbers and licence holders are therefore a matter of public record.”

Abuse of Licences

However, the GRA chief, in response, said he standing by his statements that in effect there are 100 licences.
It was explained that while some sectors, like the fishing ones, were granted licences for fuel importation for its use, in effect, several trawlers are known to be purchasing fuel and bringing it back.
Those trawlers are operating under one licence but really in effect it is several licences that require monitoring.
With some fishing companies owning several trawlers, the challenges for GEA and GRA have been increased significantly.
GRA as the premier tax collection agency for government also has to monitor large scale private importers like Bosai, Rusal, Guyana Goldfields and hundreds of gold miners who are granted fuel concessions.
Under arrangements for miners, those that declare more than 5,000 ounces of gold only pay 10 percent tax on fuel imported. Below that declaration ceiling, the taxes are about 25 percent.
The rest of Guyana is saddled with a hefty 50 percent, a major source of revenue for government.
However, the lack of capacity in properly monitoring the waterways near the border, coupled with corruption at especially border points like Morawhanna, in Region One, there have seen leakages of revenue in the hundreds of millions of dollars annually, almost mirroring the illegal drug trade, some say. The fuel there has been making its way to the coastlands.
According to Statia yesterday, it is a well known fact that in the Essequibo River islands and in Bartica, Region Seven, that most of the fuel sold are unmarked and on which no taxes are being paid.
E’bo rampant
The Parika area, leading up the Essequibo River, is filled with operations of illegal fuel, the GRA chief complained.
GRA is moving in on them.
With a number of other areas that GRA is clamping down on to collect, the fuel trade with its experienced operators who have perfected their smuggling systems, have proven a major challenge to confront.
On top of that at GEA, there have been recurring reports that markers, used to indicate taxes on fuel have been paid, are being pilfered by staffers and sold to smugglers.
Some of the smuggled fuel is ending up in some gas station, with the markers being used, making it harder for GEA and GRA to track.
What makes the situation harder is that there has been little success, at least announced publicly, of GEA making progress to crack the alleged corruption that exists within that state-controlled organisation.
Only last week an outsider was arrested with over $1.5M in markers. He fingered three GEA staffers.
GEA has not made any statements on that matter.
The fact that one boat alone had over 200,000 gallons of fuel last week would contrast sharply with the success rate of GEA versus what is believed to be smuggled into Guyana.
In 2017, GEA said that its inspectors visited 12,882 sites and collected 33,891 samples, which resulted in 29 discoveries of illegal fuel and the seizure of over 11,000 gallons of illegal gasoline and diesel.
“The work of the GEA is supported by the Guyana Police Force (GPF), Guyana Defence Force Coast Guard (GDFCG) and Guyana Revenue Authority (GRA) Customs,” the agency said.
Apart from Georgetown, GEA continues to operate out of bases on the Essequibo Coast, Bartica and Linden. “
“Further, routine and intelligence based operations continue to be done in various areas across the country as needed. For 2017, the GEA recorded 6 convictions. Compensation was accepted from 4 individuals under GEA’s legislation in the sum of $1,237,000,” the statement said.
“For 2018, the Inspectors have visited 3,191 sites and collected 8,339 fuel samples in the first quarter of the year.”
This represents an achievement of 22% and 24% respectively for its annual target. Additionally, seven discoveries of illegal fuel were recorded and over 9,000 gallons of gasoline and diesel seized for this period. There were two convictions so far and three matters are ongoing.
GEA boasted that the obligation of conformity through the licensing process supports the GEA’s rigid stance in stamping out illegal fuel smuggling through proper monitoring, enforcement and compliance.
With Guyana a net fuel importer, the annual cost is billions of dollars, a major chunk of this country’s foreign exchange and major profits for those who are involved illegally in the trade.

 

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