Latest update February 6th, 2025 7:27 AM
GCCI demands clear distinction between local and foreign businesses
By Kemol King
The Georgetown Chamber of Commerce and Industry (GCCI) is adamant that there should be clear distinctions between local and foreign businesses.
Those distinctions should grant first consideration to local businesses. The Chamber has formally submitted comments to Government on the third draft of the Local Content Policy for the Petroleum Sector. In that policy, the body has suggested four criteria for corporate bodies to be considered as local.
Former GCCI President, Deodat Indar
Former President of the Chamber, Deodat Indar, revealed this during an interview with Kaieteur Radio last Thursday, on Guyana’s Oil & You, the first and only radio programme dedicated to educating the populace about the country’s budding Petroleum Sector.
GCCI is insisting on a strict test of national awareness. The four criteria it submitted, according to Indar, are that the body’s head office should be in Guyana; that 70 percent of its workers should be Guyanese; that its board meetings should be kept in Guyana; and that 51 percent of its ordinary share capital should be held in Guyana.
Indar said that in United Kingdom Law, the country imposed a test of locality to determine how it would distinguish between its treatment of local and foreign companies when it comes to taxes. He noted that that law considers where the company’s head office is located.
These criteria, Indar said, embody what it means to be an indigenous company.
The former GCCI President, who is a Chartered Accountant, also pointed to an aspect of Guyana’s Tax Law, which he deems to be draconian. In the Income Tax Act, it is stated that to be considered ‘resident in Guyana’, one is required to be a resident for 183 days.
“That needs to change.” Indar said. “It’s so old that it cannot deal with the current dispensation of the oil industry in Guyana.”
He said that this arrangement allows companies that have set up shop over the past two years in Guyana to be allowed the same tax benefits as those that have been here for decades. Over the past few years, he said, many foreign companies swarmed to set up shop here, and have benefitted from that arrangement.
Further, he has posited that being keen on following every aspect of the Treaty of Chaguaramas when developing a local content policy may not be the best way to go for Guyanese businesses and workers.
In this regard, Indar pointed to recent efforts by Guyana’s American and British counterparts which may be interpreted as anti-integration but were intended to protect the interests of their own workers and businesses.
“You have all of these technical barriers and still you have a treaty that’s supposed to remove those… You have all of these things affecting us for decades… Now, you have oil, and everybody is invoking the Treaty of Chaguaramas.” Indar said.
The Treaty, which Guyana signed on to as a founding member, requires the removal of barriers to free trade and for several equalizing benefits for workers and businesses throughout the community.
Indar said that, despite that Treaty, there are currently many boundaries to trade and export between Guyana and countries like Trinidad and Tobago, which are there because of those countries and place Guyana at a disadvantage.
Bringing the intended integration of the Treaty into fruition is a work in progress. But at this point, Indar believes that Guyana’s local content policy, and law, should set Guyanese workers and businesses apart.
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