Latest update March 29th, 2024 12:59 AM
Apr 22, 2018 News
By Abena Rockcliffe-Campbell
ExxonMobil and its affiliates are not the only ones getting a free tax ride in Guyana. All other foreign companies (sub-contractors) employed by ExxonMobil are enjoying similar luxuries. This free ride was secured under the Production Sharing Agreement (PSA) that Guyana signed with ExxonMobil.
This fact was highlighted by the International Monetary Fund (IMF) in a 2017 report it handed to the government titled, “A Reform Agenda for Petroleum Taxation and Revenue Management.”
IMF noted that the PSA that ExxonMobil has with Guyana provides for “broad tax exemptions for subcontractors.”
Some of these foreign subcontractors operating in Guyana are Bristow Group Inc. Nobel Oil Group and SBM Offshore.
IMF noted that Article 15:10 states that withholding tax on payments made by the contractor to sub-contractors or affiliated companies do not apply during the exploration period.
Moreover, the IMF noted that Article 21 says that subcontractors engaged in petroleum operations are exempt from Value Added Tax (VAT) and import duties on imports of equipment and supplies required for petroleum operations.
Interestingly this provision is only for the benefit of foreign contractors.
The only tax that foreign sub contractors employed by ExxonMobil will have to pay is excise tax. The companies only have to pay that tax on fuel imports at a rate of 10 percent. However, locals have to pay 50 percent excise tax on fuel. https://www.export.gov/article?id=Guyana-Import-Tariffs
IMF said that Guyana forego revenue with such “generous” provisions.
The Fund said, “In addition to the forgone revenue, this (the exemptions) introduces administrative complexities and risks of tax evasion. Finally, interest and dividend payments from affiliated companies’ or non-resident sub-contractors’ branch in Guyana to its foreign or head office or to affiliated companies are exempt from withholding taxes.”
THIS IDIOT TELLING GUYANA WE HAVE NO SAY IN THE 50% PROFIT SHARING AGREEMENT WE HAVE WITH EXXON.
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