Court ruling on Glenn Lall’s legal challenge over abusive tax waivers to oil companies set for September

Apr 23, 2022 News

Kaieteur News – The High Court has set a timeline within which it will hear the oil tax case filed by Kaieteur News’ Publisher Glenn Lall. Lall had filed the case against the Government of Guyana over the extensive tax waivers granted to Exxon Mobil and other oil operators.

Kaieteur News’ Publisher Glenn Lall.

The matter which Exxon Mobil subsidiary, Esso Exploration and Production Guyana Limited (EEPGL) joined as a respondent is set for continuation before Justice Nareshwar Harnanan at the High Court in Georgetown on August 12, 2022.
As such, Lall’s Attorney Mohamed Ali is expected to file submissions in response to the defence brought by the Government and EEPGL on or before June 3 while the respondents, Government of Guyana and EEPGL are expected to file their answers by July 1.
All final written arguments are scheduled to be filed by July 29 and August 12, 2022 is set for oral arguments.
On August 12, attorneys from all sides will be given at least 20 minutes to present their case before the court, after which the Court is expected to rule on September 9, 2022.
Back in January, KN’s publisher filed the case which seeks to overturn the expansive tax provisions granted to the oil companies as part of the Production Sharing Agreement (PSA) for oil drilling exploration in the Stabroek Block.
Among the grounds, Lall lists his main contention as the provisions of the agreement violate the Petroleum Act, by purporting to extend production sharing concessions to persons other than those licenced.
Against this background, he argues that any exemptions referred to in Article 15 Petroleum Exploration and Production Act, purporting to extend concessions to persons other than the licensees are not consistent with the provisions of Act.
He contends that “licensee” as defined by the Petroleum Act refers only to Esso Exploration and Production Guyana Limited (EEPGL), CNOOC NEXEN Petroleum Guyana Limited and Hess Guyana Exploration Limited and not to any other person.
The applicant has asked the Court to make a declaration that bringing the agreement into force that the tax waiver must apply only to licensees. On the issue of discrimination, Lall argues that the Agreement “is discriminatory to Guyanese employees by exempting from personal income tax income earned only by expatriate employees of the contractor, affiliated companies or non-resident sub-contractors who are physically present in Guyana for 183 days or less on a cumulative basis in the tax year of assessment.”
Meanwhile, on the issue of taxes, Lall notes that while Section 51 of the Petroleum Act authorises the Minister Responsible for Finance to direct that any or all of the tax laws specified therein shall not apply to or in relation to a licensee who has entered into a production sharing agreement with the Government of Guyana, it however, does not empower the Minister to pay the taxes on behalf of any licensee.
Against this background, he argues Articles 15.4 and 15.5 of the petroleum agreement requiring the Minister responsible for Petroleum to pay taxes for and on behalf of the licensees, and the Commissioner General to issue certificates to that effect is therefore a violation of the Petroleum Act.
Regarding the Order by which the agreement came into force, Lall has advanced through his attorney Mohamed Ali, that the order is not a tax act or other subsidiary legislation made under such act and is therefore null, void and of no legal effect. It is for those outlined reasons that the Applicant is hoping the court will grant him the reliefs being sought. He also wants the court to declare void, Section 49 of the Act which purports to authorize the Minister to remit any royalty payable by a licensee or to defer the payment of such royalty, as being in violation of sub-sections 1A and 1B of Section 6 of the Financial Administration Act.
Further, Lall is asking the court to declare Article 15.12 of the agreement as being in violation of Article 149 of the Constitution which provides for protection from discrimination—and for also being in violation of Section 5 of the Prevention of Discrimination Act. So far, the Government and EEPGL have responded denying the claims made by Lall.