Civil Society Group slams Auditor General for issuing misleading report on oil account

Sep 18, 2022 News

– challenges Govt., GRA to release evidence on tax payments for oil companies

Kaieteur News – Civil Society Group, ‘Article 13’, has expressed grave concern about the Government as well as the Auditor General, Deodat Sharma’s non-compliance with the Natural Resource Fund (NRF) legislation.

President, Irfaan Ali

The group explained that it carried out a review of the financial statements of the Natural Resource Fund for the year ended December 31, 2021 and comparative information for 2020.

Kaieteur News understands that part of this exercise, carried out by Professional Accountants here and abroad, included a determination of whether the NRF’s financial statements which were audited by the Audit Office of Guyana complied with the law.

‘Article 13’ said that exercise found that the AG did not conduct his audit in a manner that is compliant with the requirements of the NRF law.

‘Article 13’ pointed out that Guyana agreed via the 2016 Stabroek Block Production Sharing Agreement (PSA) to pay income taxes for Exxon and its partners. Those taxes are to be paid from revenues earned for the sale of Guyana’s share of profit oil. Those deposits are made into the NRF account. The group noted that these taxes which ought to be paid over were not, yet the Auditor General in his review, gave it a clean bill of health.

GRA Commissioner General, Godfrey Statia

The civil society body said, “…It was inappropriate and incorrect for the Auditor General to issue a clean audit opinion on the financial statements of the Fund for either or both years (2020 and 2021).”

‘Article 13’ on the foregoing grounds called on the Auditor General to withdraw his statements and re-issue his opinion on the financial statements for non-compliance with the law. “We understand that such a step, though unusual, was done by the Audit Office before and that, in any case, that it is a professional requirement where a previously issued report is subsequently found to have been inappropriately issued,” the group stated.

‘Article 13’ also expressed concern that based on information available to the public, the Guyana Revenue Authority would have issued receipts and certificates to the oil companies which show that taxes were paid on their behalf by the State. This is in spite of the fact that it did not receive such funds.

Auditor General, Deodat Sharma

It said therefore that GRA must provide evidence to the public as the bearers of the liability for the tax payments, that it did receive such monies and that the certificates were properly issued.

The civil society group was keen to note that GRA may correctly assert that it is prevented by the Income Tax Act from communicating the tax information of any person to any other person, except as authorised by the President, Dr. Irfaan Ali.

Anticipating that it may seek to hide behind this legal barrier, ‘Article 13’ said it will shortly be writing to the President, asking him to authorise GRA to release the particulars of the certificates issued for the various taxes paid by each of the oil companies in 2020, 2021 and 2022.

Alternatively, it said the President can request the Minister responsible for Petroleum release that information in the same detail.

Overall, ‘Article 13’ said the Natural Resource Fund is unprecedented in its importance to Guyana and but stressed that ‘the cavalier attitude being taken by the PPP/C Administration to comply with its own legislation’ is most disconcerting.

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