Nov 11, 2022 Editorial
Kaieteur News – It is either that Guyanese don’t have sense, or that they are going to get some sense in quick order. When there is this great gap of dollars in what we are getting versus what we are giving away, then it is just a matter of time before the nation’s accounting books will be as lopsided as the 2016 oil contract.
This is what comes across in the clearest terms in the caption, ‘Guyana waived US$1B in taxes to oil companies in 2021, while earning only US$633M’ (KN November 10). The short of that ugly money story is that for every 63 cents that Guyana collects in taxes from oil companies, it gives up a hundred cents (one dollar). To make matters worse, that is not in Guyana dollars, but in American ones.
If this is not being wise for some millions, but dumb and foolish for a billion, then nothing else could be. Since, this PPP/C Government loves to wave plenty of flashy numbers around about oil fund deposits, always climbing economic statistics, and fantastic Gross Domestic Product figures, it would be interesting to hear what it has to say about that US$1B in waivers to the foreign oil companies.
The very least that the Government should look at is to come out to the point where tax waivers granted versus tax receipts are equal. To make this paper’s position clear, we are not for that balancing of tax exemptions and tax receipts. It is too generous to the foreigners, and it is too costly and draining to our national treasury.
Our position is that tax collections from oil companies must always be ahead of what we are giving. It must not be some small margin, but to the tune of hundreds of millions of American dollars. To put this simply, Guyana cannot afford all these sweet tax incentives, not even close. What are we getting in return for what we give up in tax dollars? And this is with a focus on the taxation and tax waiving for companies operating in our trillion-dollar oil sector. A huge number of Guyanese are paying their taxes, and making do with what is left. It must be the same standard applied by local Authorities where tax waivers are concerned for oil companies.
The same hardline that is meted out Guyanese citizens and Guyanese companies must be the regime lived with by oil companies. It is doubtful that local companies are the recipients of tax waivers anywhere near to the amounts doled out almost as if in a free for all (come and get it) tax culture. We are all for the encouragement of tax waivers, but it cannot be so much. But we must get what puts us way ahead in the earnings column, where tax collections are concerned. As everyone, local and foreign, should know by now, the issue of taxes paid by oil companies is a serious concern for us, and one that unleashes considerable anger. This is never more so than in the case of the ExxonMobil-led consortium operating in our offshore oilfields.
It is unconscionable that ExxonMobil, Hess Corp, and CNOOC are paying zero taxes on their combined profits per the 2016 oil contract signed by the previous APNU+AFC Coalition Government. This is unpardonable, and the longer that it remains in this state that hemorrhages Guyana’s prosperity and people, the more impatience and intolerance there is with what the PPP/C Government is doing today in approving more and more projects, without doing something substantial with taxes. Guyana’s oil point man and Lead Negotiator, Bharat Jagdeo, must find ways to squeeze taxes that are fair and reasonable out of ExxonMobil and its partners. The Vice President must stop all of his pussyfooting around the hard issue of taxes, which is a bone-in-the-throat obstacle and irritant, and compel the people at ExxonMobil to see the light on this one, and come to terms with us, as part of a bigger renegotiation package. We know about the new Production Sharing Agreement and the 10% taxes going forward. Though we have a problem with that lowball starting figure, the 10% taxes must apply to the Stabroek Block and ExxonMobil beginning right now.
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