Latest update April 24th, 2024 12:59 AM
Mar 22, 2019 News
By Kiana Wilburg
The tax payments of natural resource companies are crucial to the comprehensive production of Guyana’s first report which has to be submitted to the Extractive Industries Transparency Initiative (EITI) next month.
But Rached Maalej who has been hired as the Independent Administrator to prepare the report, encountered major challenges in trying to access such information.
During an exclusive interview with Kaieteur News, yesterday, Maalej who works with UK accounting and business advisory firm, BDO LLP, revealed that the Guyana Revenue Authority (GRA) by law is constrained from releasing the tax data.
In trying to find a solution, Maalej said that 34 companies which are believed to contribute the bulk of the revenues from the sector were asked to sign a document granting the Administrator permission to access their tax information.
Unfortunately, less than half of the companies were willing to comply. On a positive note, however, Maalej said that the eight active oil firms in Guyana readily signed the waiver.
The Tunisian said, “GRA has a point in saying that it cannot disclose anything so we tried to come up with a legal solution and we needed to, otherwise, we will not be able to comply with the EITI Standard. Looking to amend the laws right now might take too long so we tried to have what we call waivers of the confidentially constraints and GRA accepted this.
“We tried to collect waivers from the private companies but not all of them signed… It was not perfect…We need from GRA, all the information.”
The Administrator continued, “We got the information from those who signed the waivers. (They were) around 10 or 14 but these are the biggest which is a good thing. All eight active oil companies signed and GRA was able to give us but we need information even for the small ones.
“We are still trying to come up with the right solution for GRA to disclose the tax payments.”
Maalej added, “The objective is to have a complete report…GRA is working on those who did not sign the waivers. Maybe they would be able to disclose the information without the names. But it depends. They are still seeking legal advice about it but it should be feasible and we hope so…
“If we don’t get the information disaggregated then let us get it aggregated. It is better than nothing.”
In the meantime, the Independent Administrator who has six years’ experience in this field advised that the Multi-Stakeholder Group which comprises representatives from Government, civil society and the industry, work on getting the laws amended from now.
He said that the amending of the laws would support the commitment Guyana made to meet all the EITI Standards.
In some nations, like Madagascar, Maalej said that leaders have found solutions to the very issue Guyana currently faces. Maalej noted that the Prime Minister would sign a decree on an annual basis stating that 60 companies for example must have information on their tax payments submitted to the nation’s EITI body.
In other nations, provisions are placed within the licenses of companies to ensure that their tax information is accessed from the relevant authorities. Failure or resistance to adhering to the said provisions could see that very licence being revoked, explained Maalej.
The Independent Administrator explained why all of the companies in the extractive sector will not be included in Guyana’s first report which is due next month.
He said, “We have thousands of operators in Guyana’s extractive sector, especially in mining. In order to do the reconciliation of the numbers, it is not possible to cover all of the companies; otherwise the report would take five years to be ready.
“So what we do is a scoping study. That study takes three things into consideration: we have a list of payment flows that should be reconciled, the list of government entities and agencies that should be part of the reconciliation and the list of companies which should be part of that.”
The Administrator added, “And how do we select the companies? We look for the biggest based on the revenues collected by the government…So sometimes for 80 percent of the revenues collected from the sector you may sometimes recognize that it is only 34 companies which contribute to that. So that is how we select…”
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