When one examines the Stabroek Block Production Sharing Agreement (PSA), it is clear that the APNU+AFC not only sold out Guyana’s patrimony at peppercorn rates, but also placed the interests of ExxonMobil, its affiliates and subcontractors, above those of Guyanese businesses. That was the picture painted today by PPP/C Parliamentarian, Sanjeev Datadin during the budget 2020 debates, as he pointed to the unfair tax breaks the PSA contains.
According to the lopsided deal, all foreign contractors and subcontractors associated with ExxonMobil’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL), and its two international partners, Hess Corporation and China’s CNOOC/NEXEN, are exempt from Value Added Tax (VAT) and import duties on all equipment and supplies.
In fact, the only tax that these foreign subcontractors are required to pay is Excise Tax on fuel imports at a rate of 10 percent; meanwhile, locals have to pay 50 percent.
When this is done without a local content policy in place, Datadin said there is no benefit to Guyana. He noted however that all is not lost since the PPP/C has pursued efforts to address this state of affairs. Just a few weeks ago, the Irfaan Ali administration had announced that a Local Content Panel has been organized to hold consultations with Guyanese on crafting the best policy which would be backed by robust legislation.
Datadin said that this approach will ensure that local companies and individuals are the suppliers in the industry, or they are at least made a substantial shareholder in the supplier company. “This would mean at least the tax benefit would be to the benefit of Guyanese … so that we can recover for the people what the Coalition gave away …,” the Parliamentarian concluded.