Latest update March 28th, 2024 12:59 AM
May 18, 2014 News
By Kiana Wilburg
With its steady economic growth, Guyana has been deemed as having the ideal environment for foreign and local investors who desire success in a dynamic range of business ventures.
Be that as it may, many of our financial analysts have opined that a country’s inability to carry out proper screening on the type of companies investing in Guyana and the ‘kind’ of money” being invested in the economy can have dangerous implications.
They believe that it is important to have proper screening on all investment proposals to determine if companies are “high risk” or corrupt. The results of this screening should be one of the requirements before handing out “like candy, tax holidays,” they stressed.
According to a 2013 report by the United States Bureau on Economics and Business Affairs, (http://www.state.gov/e/eb/rls/othr/ics/2013/204653.htm) the Government of Guyana actively encourages foreign direct investment (FDI), but needs to do more to facilitate investment and implement more transparent and accountable procedures.
It said too that Guyanese law permits foreign ownership of companies, and there is no mandatory screening of foreign investment. However, the government conducts de facto screenings of most investments to determine which businesses are eligible for special tax treatment, access to licenses, land, and approval for investment incentives. It said too that in spite of recent efforts to remove discretionary power from various ministries, ministers still retain significant authority to determine how relevant laws, such as the Investment Act, Small Business Act, and Procurement Act, are applied.
It also highlighted that the country’s main investment agency, the Guyana Office for Investment (GO-INVEST), is the starting point for those seeking necessary permits and tax concessions, but often time-consuming engagements with other offices is likely to be required. GO-INVEST assesses whether a prospective investor’s proposals have sufficient capital backing, and, if not, inquiries generally do not progress further.
The report also said that though not required, the government expects investors to submit business proposals to GO-INVEST that outline the proposed project, the value of the investment, and employment to be generated from the investment. GO-INVEST review the proposals and makes recommendations to the Guyana Revenue Authority (GRA) in accordance with the Customs Duties Order of 2003. The GRA determines whether imports comply with regulation and whether those materials are eligible for tax relief. GRA makes the final recommendation to the Minister of Finance on whether to grant exemptions and waivers from customs duty, excise tax, and value added tax.
With this in mind, our financial analysts have called into question the nature of the due diligence reports conducted by the Guyana Office for Investment and whether a report is conducted on all companies it reviews and assesses before providing a recommendation for tax holidays. Most importantly, with the fiasco over the amended Anti Money Laundering and Countering the Financing of Terrorism Bill, it has been asked whether the Bill will have an impact on the manner in which due diligence reports are carried out by the investment office.
Recently appointed CEO of Go-Invest, Keith Burrowes who is also the acting Chairman, attempted to answer some of these questions.
Burrowes says the company currently lacks the capacity to conduct a due diligence report on all the investors it sees, thereby making it unable to identify high risk or corrupt companies. He stressed that Go-Invest lacks the necessary resources to even monitor in many cases how the concessions granted to some of the companies will benefit the country.
Burrowes said, “First of all, before we go forward, it is important for viewers to understand what is a due diligence report. At Go-Invest, the due diligence report is an investigation or audit of a potential investment, which serves to confirm all material facts. So what we basically look for is accessing the company’s financial statements, the liabilities they have and if they are involved in any illegalities. But to check for all these things you need the physical and human resources to do so and we don’t have that. If a company comes from overseas and they want to invest in Guyana, they would first have to bring their financial statements before us and we would investigate but the truth is for all the companies coming into Guyana, and they come to us, we don’t have the capacity to identify the high risk companies or the corrupt ones because these complex things require financial analysts and you can’t do these things with only two or three financial officers. We lack the capacity to carry out the economic analysis on companies to determine what they are really coming with. However, we are hoping to collaborate with the Credit Bureau, CreditInfo Guyana, in hopes that they would be able to provide information on companies that are registered with them. We currently don’t have a partnership with them. We want to know what is being done also with the concessions being granted and the tax holidays and how the country is really benefitting from this but this is a technical monitoring process and we don’t have that. We don’t know as well how we are doing in terms of our contribution to the development of the economy.”
“As it relates to the Anti Money Laundering Bill, we have taken note of the implications of money laundering on the economy and we are working along closely with the Attorney General, Anil Nandlall for the needed advice to strengthen the format we currently have.”
The Chairman stressed, “It is important for us to understand that while we are looking at areas of deficiencies, GO-Invest is looking to implement a modernization plan. We do have a plan to take us forward and once this is done, we will definitely see a major change in the way services are carried out and an overall improvement in several areas.”
THIS IDIOT TELLING GUYANA WE HAVE NO SAY IN THE 50% PROFIT SHARING AGREEMENT WE HAVE WITH EXXON.
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