Boat company servicing ExxonMobil affiliate loses appeal to GRA $773.5M tax assessment

Oct 08, 2022 News

Kaieteur News – G-Boats Incorporated, one of the companies providing marine transportation services to ExxonMobil affiliate, Esso Exploration and Production Guyana Limited (EEPGL) has lost its appeal against a $773.5M tax assessment issued to it by the Guyana Revenue Authority (GRA).

The appeal was heard before Madam Justice Jo-Ann Barlow and arose from GRA’s assessment of the Appellant’s corporation tax liability in the sum of $773,559,031 dated March 2021 for the year of income 2018.

GRA Commissioner General, Godfrey Statia

The appellant, according to court details, is a limited liability company and has been providing marine transportation to EEPGL. To carry out these duties, the company operated 12 marine vessels pursuant to a charter agreement titled “Bareboat Charter” dated April 28, 2018 between the Appellant and the true owners of the vessels.

The two issues which were up for consideration before the court were: Whether the company was entitled to claim Wear and Tear Allowance on the boats it operates for EEPGL and if GRA erred by including invoices numbered 57-00001077 and 57-00001078 when computing the appellant’s revenue for chargeable income.

Upon examination of the Charter Agreement, relevant laws and previous cases on the issue, the court categorically stated that it could not find evidence that G-Boats Inc. was entitled to the deduction of the allowance especially when it is just the Lessee.

The judgment stated, “The burden of proof would fall on the Lessee to prove to the Commissioner General (Godfrey Statia) that while he may not be the owner, he is responsible for the full burden of wear and tear. In the present case, the Appellant has been unable to establish that the full burden of wear and tear fell on the Appellant Company. On the material provided, the Commissioner General cannot be faulted for the position at which he arrived at.”

Further, the court also found that GRA did not err when it included the two invoices in its computation of the appellant’s revenue for chargeable income.

The appellant’s appeal to the corporation taxes assessed was therefore dismissed and made to pay the respondent costs in the sum of 50,000 on or before August 15, 2022.

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