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$108 billion in taxes waived for oil companies in 2022 – Auditor General Report
Kaieteur News – The Guyana Revenue Authority (GRA) in 2022 waived $108 billion in taxes to petroleum companies operating locally.
This information is outlined in the Auditor General’s (AG’s) report that was released to the public on Monday. According to the AG, Deodat Sharma, “the total contractual tax exemptions granted to the Oil and Gas Sector during the year under review totaled $108.275 billion.”
The report also noted that the total revenue collected from taxpayers within the Oil and Gas sector during the period amounted to $86.207 billion. It was explained that this sum comprised of revenue of $80.711 billion and $5.496 billion from the internal revenue and customs respectively. The AG pointed out that the Oil and Gas Sector accounted for 28.6 percent of the gross overall revenue collected by the Authority.
GRA Commissioner General, Godfrey Statia
Meanwhile, the taxes waived by the GRA for oil companies in 2022 amount to approximately US$541 million; this means that the total taxes waived to the oil companies since production activities commenced in 2019 totals US$2,841,000,000.
Kaieteur News reported that tax exemptions granted between 2019 and 2021, according to previous AG Reports, amount to a whopping US$2.3 billion. In 2019, Guyana lost US$600 million in taxes and in 2020 another US$685 million; this was followed by US$1 B in tax exemptions in 2021 and US$541 million in 2022.
It must be noted that during the same period- 2019 to 2022- Guyana only received US$1.861B in revenue from the sector. According to the Bank of Guyana (BoG) statements on the Natural Resource Fund (NRF) inflows, the country received a total of US$1,861,770,494.46.
Guyana has agreed to pay the taxes for the oil companies in the Production Sharing Agreement (PSA) it signed with ExxonMobil in 2016. The PSA states at Article 15.1 that the Contractor (ExxonMobil Guyana Limited) as well as its affiliates shall not be subjected to tax, value-added tax, excise tax, duty, fee, charge or impost in respect of income derived from petroleum operations, property held or transactions except as specified under the agreement.
It goes on to state at Article 15.4 that the sum equivalent to the taxes owed by the company will be paid by the Minister responsible for Petroleum to the Commissioner General of the GRA. A legal suit brought against these abusive tax giveaways by the Publisher of this newspaper, Mr. Glenn Lall was unsuccessful as the Court dismissed the case in February of this year.
He argued that many of the provisions listed under Article 15.1 of the Petroleum Agreement grants exemptions to persons other than licensees, which violate the Petroleum Exploration and Production Act, the Financial Administration (and Audit) Act, the Prevention of Discrimination Act, and the Constitution.
In light of this, Lall through his lawyer, contended that the provisions are unlawful, null and void, and of no legal effect. High Court Justice Nareshwar Harnanan said the minister is vested with the power under Section 51 of the PEPA and the Petroleum (Exploration and Production) (Tax laws) to grant EEPGL, CNOOC Nexen Petroleum Guyana Limited, and Hess Guyana Exploration Limited, all companies that are parties to the case, concessions of extensive tax exemptions.
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