PAY-ON-BEHALF AS A TAX CONCEPT? IT IS A FRAUD

Jun 27, 2022 Letters

Dear Editor,

The Executive branch of government and the GRA, a government agency, have finally decided to come clean on some very important provisions on the Oil Contract. They are at once revealing – and they are outrageous frauds and violations of all standards of decency.
How well known is the Pay-on-Behalf concept in Oil Contracts – as in ‘GoG is required to pay Oil Companies’ legal obligations to itself’? Further GoG is required to pay it out of its (GoG’s) share of profits. From Commissioner Statia’s press release, it goes like this: Oil Companies figure out their tax liability, prepare a tax invoice, send it GoG – and the GoG, with no money received, issues a tax receipt for the full amount of taxes due. This is not confusing. It is in fact very clear. And, it is fraud perpetrated on host country, Guyana.
Why not say, GoG waives all O.C. taxes for the life of the contract. No, it needs tax receipts whose only purpose is to commit another fraud, so it devises/invents concepts like “Pay-on-Behalf”. And, to implement this concept, it throws the whole National Accounting system into a dark hole.
Mr. Statia went on to explain: The effect of this procedure of complying with the provisions of the contract will be nil on the Consolidated Account. What Statia means to say is that there will be no book-keeping entries on the books of Guyana – but a tax receipt will be issued to the Oil Companies.
No cheque for taxes paid will be issued by dept of C. F. to GRA. And, that’s the only reason the “effect will be nil”. No cheque issued; no book-keeping entry. Impact on Consolidated Fund: Nil.
It is a well-planned, well executed fraud. This fraud is inserted into the Contract, which VP Jagdeo is in the habit of defending under the banner, “Sanctity of Contract”. He is sanctifying fraud.
Steve Coll in his Exxon book (page 159) devoted much space to describing this Oil Contract. He did not use the word, scam – but what he described is the exact definition of a scam pulled off on oil-host countries on Chad and now, Guyana.
Mr. Jagdeo should now feel emboldened to take action to have all the fraudulent clauses in the contract removed. It is at once cheating GoG of billions of dollars on the fiscal terms of the contract, and worse, it is national humiliation of the Guyanese people.
This fraud must not be allowed to be swept under the rug.

Mike Persaud

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