The Guyana Revenue Authority is out of order in either arrogating to itself or accepting a role as the lawful delegate of the government in the auditing of the pre-contract costs of Exxon Mobil’s operations in Guyana.
The Guyana Revenue Authority is the tax arm of the government. As the agency responsible for collecting taxes on behalf of the state and as a corporate body established under the Guyana Revenue Authority Act of 1996, the Guyana Revenue Authority is limited in what it can do.
The functions of the GRA as spelt out under the 1996 Act are to: “(a) to assess, charge, levy and collect all revenue. Due to the Government under such laws as the Minister may, by order specify; (b) to ensure that Guyana’s best interests are adequately safeguarded in the negotiation of international taxation agreements; (c) to promote compliance with the written laws relating to revenue and create in the society full awareness of the obligations and rights of revenue payers; (d) to advise the Minister on all matters relating to revenue; (e) to perform such other functions in relation to revenue as the Minister may direct.”
While the Act gives the Minister the power to order the GRA to perform “other functions”, these functions must be tax-related. The GRA cannot be delegated an auditor under the Petroleum Act.
The GRA is not the external auditor of the government. It would amount to a conflict of interest for the GRA to perform the role of auditor for the government under the Petroleum Act and then to have to pronounce on this audit in terms of its tax implications. It would be outside of the GRA’s mandate to be providing auditing services for the government.
The GRA, regardless of whether it is a part of the public service or as a corporate body, therefore cannot be the lawful delegate of the government under the Petroleum Act.
Its functions are limited to tax collection and not to determining the accuracy of the information provided by ExxonMobil to the government.
An audit for taxation purposes is likely to involve far less scrutiny than an audit of pre-contract costs. And the reason for this is that the GRA does not have much taxes to collect from ExxonMobil and its sub-contractors.
ExxonMobil enjoys widespread exemptions from taxes so GRA really does not have much cause to audit the pre-contract costs of ExxonMobil.
In respect to the accuracy of information provided by Exxon, the GRA has an interest only in so far as taxes are concerned.
The GRA can undertake its own audit to determine what taxes are to be paid by ExxonMobil. If in the course of such an audit it finds that there are errors or omissions or even fraud, its main concern has to be the tax implications of such actions.
Such information can be used by the GRA to prosecute ExxonMobil for taxes owed to the government but the findings of any such audit cannot be shared with the government since this would constitute a breach of the confidentiality arrangement between a tax agency and its clients.
The Guyana Revenue Authority Act prohibits any member of the GRA from publishing or disclosing to any person the contents of any document, communication or of information whatsoever, which relates to, and which has come to that person’s knowledge in the course of, his duties, except as authorized by the Authority or by the courts.
Respectfully, it must be admitted that the Authority cannot reveal to government the specifics of any audit conducted by the GRA on pre-contract costs since this would be tantamount to revealing privileged information to an unauthorized source.
The GRA’s role in auditing the pre-contract costs of ExxonMobil is therefore a limited one. The tax agency must confine itself to assessing, charging, levying and collecting taxes. It can neither be appointed as legal delegate of the government in auditing, on behalf of the government, pre-contract costs.
The other reason why the GRA cannot become the lawful delegate of the government to audit pre-contract costs of ExxonMobil is that it simply does not have the capacity to do so.
The GRA is only bluffing itself into believing that it has the capacity to audit the pre-contract costs of ExxonMobil.
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