PPP and PNC misleading Guyana on windfall taxes

Dec 15, 2024 News

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…each household lost minimum of $1M in 2024 – K/News Publisher

Kaieteur News – The two major political parties in Guyana are both misleading the nation on the implementation of windfall taxes, a provision that has been applied by a number of oil producing countries around the world.

This was recently highlighted by Publisher of Kaieteur News, Glenn Lall, during his radio programme aired Friday on 99.1/99.5 FM.

The businessman prefaced his argument by pointing out that each Guyanese household lost over $1M in 2024, due to the failure of leaders to demand a windfall tax on the excess profits being earned by ExxonMobil from its ongoing oil production in the Stabroek Block.

A windfall tax is a tax levied on an unforeseen or unexpectedly large profit. Back in 2022, amid surging oil prices influenced by the war in Ukraine, several top oil producing countries such as the United Kingdom, the United States of America and Canada introduced a windfall tax on the excess profits that were being earned by oil and gas companies.

Since this would not affect the expected revenue of companies, this provision does not constitute a breach to oil contracts.

Be that as it may, both the People’s Progressive Party and the People’s National Congress Reform (PNCR) are reluctant to institute this provision to ensure the country benefits more from its resources.

For his part, Lall believes this failure amounts to nothing less than a betrayal to every Guyanese.

The businessman during his radio programme, told listeners that each household in the country could have benefitted from over $1M this year through the implementation of a windfall tax.

To this end, he said, “I honestly believe that some of these political leaders should be sitting in a prison cell fuh what they are knowingly doing to us, with all these resources this country has.   To tell you the truth uncle, a prison cell is too good for these chaps.  Let me make this clear, at the end of this year, 2024, every household should have had more than a million dollars sitting in their bank accounts. This could have been achieved if only the PPP and the PNC had made just one simple decision, without even having to touch or change that oil contract.”

Lall concluded that the leaders were either corrupt to the core, or have pure hatred for the people of Guyana.  “Why else would they fail to act? Look uncle, had they both demanded a 50% windfall tax from Exxon, like every other oil producing country did with their oil companies, every one of the 300,000 households in Guyana, would have received more than a million dollars from the oil pumped in 2024 alone. Even if they had settled for 25%, every home could have collected $700,000 in their bank books,” the newspaper publisher reasoned.

He was keen to note that for a windfall tax to be instituted no renegotiation of the lopsided 2016 Production Sharing Agreement (PSA) was required.

Instead, Lall argued that the leaders have left the future of Guyanese in jeopardy, throwing a mere $100,000 cash grant at adult citizens.

He said, “Five years of pumping oil, and this is all they have to show for it, $100,000…Come on people. Wake up!  It is time to demand better. It is time to hold these leaders accountable and reclaim what is rightfully ours.  We deserve better, and the time to act is now.”

Lall pointed out that Exxon’s lowest base price to invest in Guyana and make a return is US$55 per barrel. As such, the businessman explained, “Anything beyond $55 per barrel is honey, which Exxon alone drinking.”

Vice President Bharrat Jagdeo was recently asked by Kaieteur News why the government is still reluctant to apply a windfall tax on the excess profits being earned by Exxon even though it does not affect the contractor’s expected revenue.

In dismissing the issue, he said, “I have dealt with windfall taxes in the past and why we believe that windfall taxation should not be pursued at this time. I dealt with it in the past if you go back and read.”

Meanwhile, advisor to the Opposition Leader on Economics and Oil and Gas, Elson Low during a PNC press conference said, “When this windfall tax issue really came forward was when we were looking at the possibility of a $170 per barrel and at a substantive change to the industry as a whole. So, I would say given that we are not looking at such a substantial change to the industry, it is not something that we are looking at. It’s not something that we have raised in our oil policies; however, looking at our previous statements, it’s only in a very bizarre scenario that we would incorporate that into the model.”

Lall concluded that the country has found itself in a very sad situation with two political parties forcing Guyanese each night to go to beds hungry, despite all the wealth in the country.

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• Lall, misleading, PNC, PPP, profits, tax, windfall

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