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GRA is not an industrial relations police

Nov 18, 2019 Features / Columnists, Peeping Tom

There is a dispute between workers of RUSAL and the union representing its workers. The dispute is about the level of wages and salaries increase.
In the meantime, the employer is said to be taking steps to protect its assets by moving them to other locations. Some suspect that the employer may also be selling off assets.
There is attempt to stop the company from de-capitalising since it is felt this could mean the closure of the company and the loss of jobs. As such, the Guyana Revenue Authority (GRA) is being placed on the alert about the possible disposal of equipment on which duty free concessions were granted.
The GRA’s is not a proxy for saving workers’ jobs.  It is not an industrial relations police. The GRA should be not be inveigled to become involved in an industrial relations dispute. That is not their role or mission.
The GRA is concerned with the collection of taxes. They also are required to ensure that items on which duty free concessions are granted are used for the purposes for which the concessions apply.
The terms of those concessions would be contained in the agreement which was signed between the government and the company. That agreement would specify the life of the concessions and the obligations of the company if it decides to dispose of any machinery or equipment which was subject to concessions. There is no law which states that when a company decides to sell a piece of equipment in which it has obtained concessions, it has to have the permission of the government. Such matters are governed by the signed contract between RUSAL and the Government of Guyana.
Depending on the agreement signed between the government and the employer, the GRA may or may not have a lien on the proceeds of the sale of assets. The GRA’s entitlement is to collect any taxes, which may be due as a result of that sale. It is not an arbiter of the right of the company to dispose its assets. It cannot dictate whether anything should or should not be sold. The GRA can say that if an item is sold or disposed of otherwise, then any taxes due should be paid.  And the GRA’s entitlement to recover taxes, which may have been foregone as result of duty free concessions, only arises if this is provided for in the incentive agreement between the company and the government.
Duty free concessions have a shelf life. If you grant a company a concession on a piece of equipment, it is not likely that the agreement between you and company would allow for a portion of the taxes to be recouped ten or more years after the item was imported. Assets depreciate over time and, correspondingly, the value of concessions. In the case of government workers, they do not have to ask the government for permission to dispose of duty free vehicles, which have passed three years since they enjoyed the concessions. After three years, the concessions expire, unless otherwise provided for.
The Production Sharing Agreement between ExxonMobil and the Government of Guyana gives the company a waiver of taxes, value added taxes, excise taxes, duties free of charges on items used in its petroleum operations. This is a virtual blanket concession on anything used by Exxon and its contractors in exploration and production of petroleum. There is no provision stating that when Exxon feels that it is time to dispose of the items enjoying these concessions that it has to be given permission by the GRA or that it has to pay any portion of the taxes foregone.
The terms of concessions RUSAL would have gotten from the government has not yet been made public. We do not know as yet if the company has repay any portion of those taxes foregone should it decide to dispose of any of its assets. These things would be governed by the agreement RUSAL signed with the government and the GRA must not get mixed-up in becoming a protector of workers’ rights.
No one should attempt to conscript a tax agency into a dispute between employers and employees. That is not the role of the GRA and has never been its role. If there are taxes to be collected, GRA must file the necessary action to recoup such taxes.

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