GRA within its right to audit ExxonMobil’s US$900M pre-contract costs –Statia to critics

Sep 07, 2018 News

GRA Commissioner General, Godfrey Statia

There has been growing concern on whether the Guyana Revenue Authority (GRA) can “properly, legally and meaningfully” audit ExxonMobil’s controversial $900M pre-contract costs.
But GRA’s Commissioner General, Godfrey Statia confirmed yesterday that the tax authority is legally empowered to do so.
In a missive to the media, Statia highlighted that Section 6.2 of the well-publicised Guyana-ExxonMobil Petroleum Agreement says, “The Minister of Government may delegate to Other Government entities to perform these or any other duties and the Contractor shall fully comply with such lawful delegation upon ninety (90) days written notice from the date of receipt of such notice.”
The agreement goes on to state that the duties entail reviewing any proposed exploration work programme and budgets presented by the contractor; review of any development plan submitted by the Contractor in accordance with an application for a petroleum Production licence; ensuring the accounting procedures are followed; and ensuring compliance with the provisions of this Agreement, the Petroleum Act and Regulations.
Statia said that GRA as an agent of the Government for the purposes of tax collection is therefore acting as a lawful delegate. He reminded too that GRA has been putting in place, the necessary infrastructure and professional staff to deal with this activity.
The tax chief said, “As Commissioner-General, I am confident in the ability of the GRA to undertake this task and get this job done. I trust that this lends some clarity to the never ending debate of the Audit of petroleum activities.”
Chartered Accountants, Chris Ram and John Seeram have in recent times, expressed their concern about GRA auditing the pre-contract costs.
Seeram had said that the Auditor General should be the one conducting the audit of ExxonMobil’s pre-contract costs while Ram raised doubts that the GRA can “properly, legally and meaningfully,” audit the operations of the exploration company.
Ram had also expressed the view that the GRA has no jurisdiction over the Petroleum Agreement or to demand returns from the oil companies since the obligation to submit those returns rests with the Minister.

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