Latest update November 27th, 2024 12:07 AM
Jagdeo satisfied giving up billions in taxes for a few jobs
Vice President, Dr. Bharrat Jagdeo
Kaieteur News – Since the discovery of hydrocarbons in Guyana, there has been a spike in the registration of foreign companies looking to invest here. The Ministry of Foreign Affairs and International Cooperation has even set up a Diaspora Unit, to facilitate Foreign Direct Investment (FDI). This since, according to the administration, Guyana does not have the capital required for large scale development.
This much was reiterated by Vice President Bharrat Jagdeo, during his weekly press engagement this past week and was pressed on the pros and cons being assessed in light of the ‘exorbitant concessions’ that are granted as incentive to attract FDIs into the country.
According to the Vice President however, notwithstanding the billions in forgone revenue each year through these concessions, Guyana is getting- most of which are being provided under less than desired conditions.
He told reporters, “…when you mention merely jobs for people who have jobs its cushy, but for those people who don’t have a job…it’s a different story.
Further defending the concessions, the Vice President said, the reality is you have tens of other countries producing the same things, “we live in a competitive environment.”
He was speaking to the need for attracting large scale investments such as in the bauxite industry.
Further defending giving up taxes for a few jobs, the Vice President cited the hotels such as the Marriott and the concessions afforded.
Qualifying his position, he said government could have opted to not give any tax holidays and the hotel would not have been built in the first place. “That kind of thinking is backward and doesn’t take account of risks; certain risks people take when they invest,” Jagdeo said, doubling down on his defence.
According to the Vice President, “I am all for Guyana and protecting our people,” and pointed to this being achieved legislatively.
Jadgdeo used the occasion to cite as example, the Local Content Law, meant to carve out niche industries within the oil and gas industry exclusively for Guyanese, as well as others such as the Trade Union’s Recognition Act and the Occupational Health and Safety Laws.
He was adamant the total reserves accumulated in all of the banks in Guyana didn’t even amount to US$10B. as such, according to Jagdeo, all of the country’s savings could not even construct one Floating Production Storage and Offloading (FPSO) vessel to engage in the oil industry.
Guyana, he concedes, has significant resource potential as had been acknowledged by each of his predecessors.
According to Jagdeo however, “we don’t have the resources” to unlock the potential resources.
Pointing to what he called the largest economy in the world the United States of America (USA), still being heavily dependent on Chinese FDI to the tune of trillions, he posits that in Guyana, achieving the same would mean giving in to a lot of waivers for the large companies because you need it get the projects up running. This he said, would in turn benefit the entire economy eventually, since it would mean more disposable income being made available for citizens, essentially foregoing billions in concessions for the millions the few jobs pay.
Further defending concessions handed to companies such as exemptions from fees and taxes on gold exported by foreign gold mining companies the Vice President told reporters, “…we are a small country we will never be able to grow and thrive if we depend only on domestic demand.”
who are made to pay their full taxes It should be noted however that while foreign operators are exempted from paying any exportation taxes associated with their production in Guyana, the same does not obtain for locals, despite a lowered royalty.
On the matter of royalty, despite the President lauding changes that allow for the higher payments of royalty from foreign gold operators, the contracts have been worded in such a way that the companies essentially still choose the rate at which royalty is paid.
All in all, the President expressed satisfaction–in light of the prevailing domestic and exogenous factors–in the trade of for jobs against the forgone billions in exorbitant concessions granted to foreign operated companies.
- Both President Irfaan Ali and Vice President Bharrat Jagdeo, concessions, Diaspora Unit, hydrocarbons, Vice President
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