Latest update March 28th, 2025 1:00 AM
Latest News
- “It will be a very bad day for Venezuelan if they attack Guyana or ExxonMobil”—Rubio declares
- Guyana gets info on U.S. tax evasion allegations against Mohameds, Mae Thomas
- US$35 injected into banking system to address foreign currency shortage—VP Jagdeo
- Citizens to stage protest today against lack of access to information in Guyana
- Guyana vows to stand with U.S.
Spain pushes ahead with Windfall Tax Bill
Kaieteur News – The Government of Spain is moving ahead with its Windfall Tax Bill which is intended to levy US-billions from banks and energy companies to alleviate the cost-of-living crisis being experienced by Spanish families.
On Friday, the Bill was approved by Spain’s Congress, which is the lower house of parliament. It was stated that with Congress’ approval, the Bill will be sent to the Senate for final vote, where it could be approved as is, if the upper house does not add any amendments – this is according to an international news reports.
(Photo credit: Finshots)
The Spanish government had announced in July 2022 that it intends to raise money through a windfall tax levy. Spain’s Prime Minister, Pedro Sánchez, has said the taxes are a way for big business to “lend a hand” while many Spanish families are suffering from a sharp rise in the cost of living.
Bloomberg reported that Sánchez has put in place some of Europe’s strongest tax and energy price measures, costing more than €35 billion (US$3.6B) in an effort to ease the cost-of-living crisis in his country.
A windfall tax is a one-off tax imposed by governments on a companies, specifically targeting those that benefit from something they were not responsible for. In this instance, the ongoing Russia-Ukraine war has sent oil prices soaring and triggering a cost of living crisis in many countries. Amid the war, oil and gas companies have been seeing record-breaking profits and as such, many Governments have introduced a windfall tax on the big profits.
While countries are hiking the windfall tax on the oil majors, other countries like Norway and Czech Republic are also clamping down on them and have signaled their intentions to raise US-billions through a windfall tax on the companies.
Also, earlier this month, President of the United States of America, Joe Biden threatened to increase the tax on the oil majors ‘outrageous’ profits.
Importantly, the additional tax being imposed on oil and gas companies who are ‘war-profiteering’ comes at a time when American oil giant, ExxonMobil and its associates are enjoying tax-free profits in Guyana.
In fact, President Irfaan Ali is adamant that Guyana is new to the oil business and as such, he was reported in the media as stating that Guyana will not be implementing a windfall tax on the oil companies nor will Exxon and its affiliates be subjected to the new terms his administration announced for future oil blocks.
This publication had reported that Guyana has found itself in a conundrum where it is foregoing more than it earns. Exxon’s affiliate, Esso Exploration and Production Guyana Ltd (EEPGL), is the operator of the country’s richest oil block (Stabroek Block) and continues to enjoy tax-free earnings owing to the Production Sharing Agreement (PSA) Guyana signed onto with the oil major.
According to the 2016 PSA, Guyana has agreed to, under the taxation provisions, to pay ExxonMobil’s share of Corporation and Income Tax. As such, it would mean, that Guyana foregoes each year, billions of US dollars. On top of this, documentation to this effect is then provided to the US based company allowing it to not have to pay any taxes in its home country for its earnings overseas.
Guyana’s Stabroek Block is 6.6 million acres (26,800 square kilometers) and has approximately 11 billion proven barrels of oil. EEPGL holds 45 percent interest in the Block. Hess Guyana Exploration Ltd. holds 30 percent interest, and CNOOC Petroleum Guyana Limited holds 25 percent interest. For the third-quarter of 2022, Exxon announced that its overall earnings was a record-shattering US$19.7 billion – whereas Hess reported that it earned a net income of US$515 million and CNOOC recording US$5.1 billion.
In January 2022, Kaieteur News’ Publisher, Glenn Lall, approached the High Court to challenge the Government of Guyana’s (GOG) decision to grant massive tax waivers to the oil companies and their affiliates.
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