GRA will level playing field for local suppliers in oil sector - Statia

GRA will level playing field for local suppliers in oil sector – Statia

Sep 09, 2019 News

By Kiana Wilburg

Commissioner General of the Guyana Revenue Authority (GRA), Godfrey Statia, says he is a proponent for local companies being given a fair opportunity to compete alongside foreign enterprises for contracts to supply goods to the oil sector.
The Commissioner General revealed that locals will be given tax breaks on those supplies being imported for the industry.
During an exclusive interview, Statia noted that he is aware of the Kaieteur News article carried a few days ago which highlighted that the subcontractors for ExxonMobil as well as its affiliated companies enjoy tax breaks for their imports. With that in mind, the Commissioner General said he supports calls that Guyanese should enjoy this privilege too. The tax chief noted however that he is not going to sit around and wait on a policy or piece of legislation to level the playing field.
“We are not waiting for a policy, we are trying to do what we can. We are being proactive,” the Commissioner General added.
Statia said that the only problem he is perhaps fearful of is dual purpose suppliers, meaning those firms which divert the tax free goods that are meant for the oil sector, to other local market streams.

GRA Commissioner General, Godfrey Statia

“So you have to devise a way to show that you are importing just for Exxon…There are some firms, you know from their supplies that it is strictly for Exxon’s operations so that is easy. They are bringing in specialised equipment and machinery, pipes etc for the sector…But the local companies have to be truthful because if they are caught, that tax break would be removed,” the Commissioner General expressed.
Back in 2016, Trinidadian Local Content Expert, Anthony Paul had advised that exemptions for only foreign subcontractors is discriminatory to locals and should be addressed, whether by law or the review of contracts. In a report that he wrote on the request of the United Nations Development Programme (UNDP), Paul stressed that such exemptions could actually undermine Guyana’s local content efforts.
The Local Content Expert recommended that the concessions, which are granted to the oil sector be reviewed to ensure that Guyana is not giving away more than it should. Paul had also suggested that a special Negotiating Task Force be established to handle that particular issue.
In Guyana’s third draft of the Local Content Policy, no recommendation was made for locals to be given the same tax break treatment as foreign suppliers.
It was in February, last, that Director General of the Ministry of the Presidency, Joseph Harmon, had announced that British Oil Consultant, Dr. Michael Warner, was hired to complete the final draft of the policy. He was given the $22M contract even though he has no track record of independently producing a local content policy for a country.
Subsequent to that announcement, Kaieteur News had confirmed with former Business Minister, Dominic Gaskin, that this contract was never advertised.
Kaieteur News had also raised several questions about Dr. Warner’s connection to ExxonMobil, the firm that brought him to Guyana in the first place to train local businesses trying to access the supply chain.
Dr. Warner was actually a fixture at Exxon’s Centre for Local Business Development on South Road for this matter.

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