Tax scam or corporate scampishness

Jul 10, 2024 Editorial

Kaieteur News – The normal course of events is to pay taxes that are owed to the proper authorities, collect proof of payment (receipt) and move along to the next item of business. No taxes paid usually means no receipt is issued. Is there any citizen of this country who didn’t pay a cent of taxes, personal or business, that could show his or her face at the Guyana Revenue Authority and claim a receipt? Guyanese should have no difficulty with the answer to that, nor that there is the likelihood of security being called to show the crackpot the door. Yet what no taxpaying Guyana can do, ExxonMobil is able to pull off, with the active collaboration of the Government of Guyana. ExxonMobil not being made to pay its fair share of taxes is an insult to begin with, and this strange business of the company being given a receipt is another wad of spittle running down Guyana’s face.

Article 15:1 of the 2016 Production Sharing Agreement is clear: “the contractor (ExxonMobil Guyana) as well as its affiliates shall not be subjected to taxes….” According to the same PSA the bizarre then follows. The Minister agrees in article 15:4: “that a sum equivalent to the tax assessed…will be paid by the Minister to the Commissioner General, Guyana Revenue Authority on behalf of the contractor and that the sum of such will be considered income by the contractor…”

Simply stated, one arm of the Guyana Government is paying the hypothetical taxes owed by ExxonMobil to another arm of the government, and then presenting the company with a receipt that is considered income. It is hypothetical because ExxonMobil is not paying any taxes to Guyana, but now it has an official Guyana Government (GRA) tax receipt to use in the US, specifically the IRS. In 2023 alone, and as extracted from the company’s annual report, the imaginary tax expense was US$658M. In a country outraged and galvanized into action that would be money coming into Guyana’s coffers, and not this corporate con game that is going on year after year in plain sight.

Frankly, we at this paper are struggling to come up with a civil description of this whole income tax farce. It is a product of ExxonMobil’s savviness, its unlimited cunning and resourcefulness. If it is not a corporate con artist treating itself, it is a sleight of hand. Prominent Guyanese attorney-at-law and chartered accountant, Chris Ram, calls the entire setup as “a complete fraud. It’s all skullduggery and accounting scampishness.” As much as we believe that those words are sharp and jarring, they still fall short in capturing the full essence of this diabolical tax concoction that ExxonMobil has one Guyana government after another delivering, without so much as any public resentment. Guyana’s chief oil policymaker, Vice President Bharrat Jagdeo, who is usually very vocal with many matters is uncharacteristically silent about what is a total rigamarole. In Churchillian terms, this should be declared a felony perpetrated by predators and coated in treachery.

When something of this sickening and dishonest character unfolds in broad daylight, how can ExxonMobil ever be seen by honest Guyanese as a trusted partner? The company studies for every opportunity to leech Guyana, then pounces without a moment’s hesitation. There is neither thought nor care about the appearance of what is nothing but a costly white-collar scheme. Pursuant to the contract, ExxonMobil does not have to pay taxes, but it is not satisfied with those generous circumstances. It had to engineer this crude and ugly tax arrangement involving creative receipts to extend its machinations from Guyana to America. How does any national government consent to be a party to this tax masquerade, to maintain this charade? Where are the leaders in the PPPC Government who are always ready for a showdown and throwdown with Guyanese at the drop of a pin? Why are they so feeble in finding ways either to work around this embarrassment, or to denounce it and carry a relentless fight against it? It is what any government concerned about its dignity would embark upon. It is the way that leaders with any self-respect would be, and not rest until this tax abomination is eradicated.

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authorities, Editorial, ExxonMobil, Government, Guyana

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