With the Guyana basin now de-risked, Commissioner General of the Guyana Revenue Authority (GRA), Godfrey Statia says that the tax exemptions for future oil contracts would need urgent amending.
In an exclusive interview with the Guyana Standard, Statia commented that the tax exemptions granted to ExxonMobil “are exorbitant and the wholesale tax giveaways cannot continue.”
He said, “When Exxon came into the market to explore, they were given various tax breaks to encourage them to stay because as you know, this is costly work and nobody really knew what was out there. But if these people find oil then how can they stay enjoying the same tax breaks? It should have been altered and the negotiators did not do anything about that. GRA was not consulted or else we would have pointed that out.”
The tax chief noted that ExxonMobil enjoys a range of tax exemptions on all imports and it is even exempt from paying capital gains tax.
“So when these people bring in machines and equipment by the hundreds, they are not paying taxes. When or if they decide to sell it, the profit they make is supposed to be taxed at 20 percent. But guess what? The tax man is collecting nil. Yet, Guyana is collecting a mere two percent royalty and 50 percent of the profit oil. We should be getting more,” an impassioned Statia expressed.
The Commissioner General said that the country needs to relook at the tax exemptions granted to the oil sector now that there is proven oil reserves offshore Guyana.
He said, “We need to decide now. It cannot, it should not stay the same way. It is either we continue with the same tax exemptions but collect a higher royalty and profit split or, let them pay all the taxes upfront and they can be compensated by us taking a smaller share of the profit oil but with a higher royalty.”
Whatever road the country goes down, Statia said that will be left to the government. He stressed, however, that heading down the same path will be to Guyana’s own detriment.