AG Report reveals... GRA struggles to find experts to beef up capacity to monitor oil cost

AG Report reveals… GRA struggles to find experts to beef up capacity to monitor oil cost

Nov 08, 2022 News

…as Jagdeo races ahead with more oil projects

Kaieteur News – The Guyana Revenue Authority (GRA) appears to be struggling with efforts to find critical specialists to boost its capacity to monitor the country’s booming oil and gas sector.

GRA Commissioner General, Godfrey Statia

This state of affairs was noted in the 2021 Auditor General’s Report that was tabled in the National Assembly yesterday.

GRA said its Petroleum Revenue Department had a staff complement of 31 officers as of August 2022. In 2021, it said four staff was recruited, while four staff had since resigned from the Department. The Authority said it has 36 vacancies to fill for the Department which is tasked with handling petroleum tax audits, value added tax refunds, objections and appeals, accounts management, and debt management. It is also responsible for programme, planning, risk management and tax advisory services.

Last year, GRA had said its Petroleum Revenue Department only had 26 specialists up to September 2021. It had also lamented the pains it experienced in trying to boost this number, even when it resorted to upskilling in-house personnel.

GRA said, “It has been found that because of better salaries in the private sector, some of these officers leave as soon as their training is completed, hence the need for improved remuneration. Further, since this is a new section from which the future of the nation depends, management of the GRA has been at pains to build a cadre of patriotic and learned officers that will be a shining light for others to follow.”

GRA said management therefore had moved to sources external to the GRA for qualified accountants, auditors and financial analysts.

It said too that the structure of the department also allows for a petroleum engineer (1engineer) and a cost recovery audit section (20 officers). No update was provided on this in the AG’s latest report.

Kaieteur News understands that the strategy deployed to effectively commission and staff the Petroleum Revenue Department entails training of officers from various audit functions throughout the Authority to build a repository of necessary skill sets and competencies.

In 2021, GRA said multiple training sessions were held by the International Monetary Fund (IMF) to build capacity to administer domestic taxes within the oil and gas sector, including training in statutory interpretations, taxation of subsidiaries and external companies in Guyana, identifying the taxpayer and taxable sources of income, risks to an understatement of chargeable income, and taxation of resident and non-resident companies.

In addition, there is the GRA’s Customs Petroleum Unit which is tasked with the monitoring and oversight of production, a responsibility which requires the staff of the Unit to be equipped and accommodated on board, the Floating Production Storage and Offloading (FPSO) vessel. GRA said this Unit is headed by a Deputy Commissioner and 21 specialist staff in the areas of inventory monitoring, data analysis, oil lifting and export, exemptions, and entry processing.

The difficulties being experienced by GRA and many other regulatory bodies have been flagged as an area for concern since the government is still moving full steam ahead with major development projects in the Stabroek Block.

In addition to the four major oil production projects already sanctioned, namely at Liza Phase One, Liza Phase Two, Payara and Yellowtail, development plans are being streamlined for a fifth, called Uaru.

In addition to the aforementioned projects, the Guyana Government has reassured the international market that it will be hosting its first oil blocks auction by year end or the first quarter of 2023. That exercise will see 14 oil blocks going up for grabs and increasing the armada of ships offshore to be policed.

The foregoing activities, among several others, have left stakeholders worried about whether the country is biting off way more than it could chew.