Vice President, Dr. Bharrat Jagdeo has assured that while the Government of Guyana wields tax exemptions as a powerful tool to attract investments, including Foreign Direct Investment (FDI), some companies, including those involved in oil and gas are abusing these privileges.
During his recent press conference, he stressed the importance of effectively managing these tax exemptions to prevent abuse and the measures in place to safeguard the country against misuse.
According to Jagdeo, the Guyana Revenue Authority (GRA) is entrusted with the responsibility of overseeing tax exemptions and ensuring they are used for their intended purposes. He said that GRA’s role is to police these exemptions and prevent any abuse and acknowledged that while there have been instances of abuse, even by reputable companies, Jagdeo highlighted that the system has been effective in detecting such cases and compelling restitution.
The official made the foregoing comments while speaking about the staffing challenges within GRA. He clarified that these issues primarily affect the petroleum unit, where staff members are frequently being recruited by oil companies. However, he reassured that GRA’s regular departments, including those responsible for monitoring tax exemptions, are adequately staffed.
Guyana, for the past few years, has been recognized as an attractive investment destination, with a remarkable projected growth rate of 37.2 percent for 2023. This growth trend has allowed Guyana to outperform other Latin American and Caribbean countries in terms of economic expansion.
Moreover, in 2022 Guyana achieved a remarkable feat by attracting the highest foreign direct investment (FDI) inflows in the Caribbean region, reaching an impressive total of $4.389 billion.
This was unveiled in the Economic Commission for Latin America and the Caribbean (ECLAC) 2023 report on Foreign Direct Investment in Latin America and the Caribbean.
The report had noted that this result closely mirrored the record-breaking inflows witnessed in 2021, with only a marginal decrease of 1.5%. The surge in investments was attributed to the sustained interest of foreign investors in Guyana’s lucrative hydrocarbon sector, which accounted for an overwhelming 99% of FDI inflows in 2022, despite experiencing a slight 2% decline compared to the previous year. Meanwhile, it noted that investments in the manufacturing sector, comprising a mere 1% of the total, also witnessed a decrease of 9%.
Nevertheless, Jagdeo said that Guyana’s prudent management of tax exemptions is essential to maintain its status as an appealing investment destination, and the government, through GRA, is committed to ensuring their responsible utilization in support of the country’s economic growth and development.