Govt. continues to hide how much taxes it’s paying for Exxon and partners – Chris Ram

Dec 23, 2023 ExxonMobil, News, Oil & Gas

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Three years later…

Kaieteur News – Chartered Accountant, Christopher Ram in his most recent Oil and Gas Friday column published in the Stabroek News, has rebuked the government for failing to disclose how many taxes it is paying on behalf of an ExxonMobil-led consortium operating the Stabroek Block.

Readers would recall that the Production Sharing Agreement (PSA) Guyana signed with Exxon, Hess Corporation and CNOOC Petroleum Guyana Limited in 2016 requires the Government of Guyana to pay to the Guyana Revenue Authority (GRA) the Corporation Tax owed annually by the oil companies. Those payments, the agreement states, are to come out of the Guyana’s share of profit oil.

While the money Guyana makes from the sale of profit oil is deposited into the Natural Resource Fund (NRF), in addition to royalties received, none of the audited financial statements for the fund state anything about withdrawals being made to cover tax payments on behalf of the Exxon group.

When contacted on the matter yesterday, Auditor General Deodat Sharma, who is in charge of auditing the NRF declined to say why the financial statements make no reference to the taxes that ought to be paid over to GRA. He said, “I acknowledge that the Stabroek Block Agreement states Guyana must pay the taxes but I think it is a little more than that…I will have to find out from the Governor of Central Bank and (GRA’s) Commissioner General (Godfrey Statia).”

The Stabroek Block agreement further requires GRA to issue to the oil companies, certificates to show that they have met their tax obligations. It therefore begs to question if the Guyana Revenue Authority issues a certificate to the companies stating that it has paid its taxes when the money to pay the taxes remains in the NRF. Calls to the tax chief yesterday for a response to this matter proved futile.

Since Bank of Guyana is the operational manager of the NRF, Kaieteur News also made efforts to contact its Governor, Dr. Gobind Ganga. But this proved an unsuccessful pursuit.

Kaieteur News also reached out to Chairman of the Board of Directors of the NRF, Major General (Ret’d) Joseph Singh to ascertain if the absence of transfers from the NRF to GRA to cover the tax obligations of the oil companies is a concern for the Board.

He said, “Based on the (NRF) Act, what the board is responsible for doing is ensuring whatever disbursements are made, that the Central bank which has the operational responsibility for the management of the fund informs us on the amounts paid as well as those deposited into the Federal Bank where the NRF account sits.”

The Chairman added, “Our job is to ensure disbursements are in accordance with the Act, meaning approved by parliament and any disbursements go into the Consolidated Fund… I can’t answer your question but based on the Act, our job is this. That question should be directed to Ministry of Finance and Natural Resources. It really is out of our remit.”

As for Christopher Ram, he nonetheless expressed his concern about what he believes is an inflated NRF account. In his column he said, “…The problem is that the whole business of the payment of taxes and the issue of certificates have been withheld from the public.”

The columnist added, “I find it difficult to believe that the Guyana Revenue Authority would issue a receipt for money it does not collect. Forget for a moment, that those oil companies also claim credits in their home countries for taxes represented by the Certificates but which they did not pay.”

Overall, Ram said he considers this whole matter a complete cover-up involving key agencies of the state. Ram said one can only speculate whether the reason for this cover up is to prevent the Guyanese public from knowing the annual amount of taxes paid by the government on behalf of these avaricious oil companies.

With the government being in office for more than three years, and failing to disclose such critical information, Ram deduced that the PPP/C is not an iota different from that of its predecessor which it has criticized for keeping citizens in the dark.

With there being no withdrawals from the NRF in the form of tax payments on behalf of these companies to GRA, Ram opined that the balance of the account is overstated by tens of billions of Guyana dollars, with a corresponding error in the Consolidated Fund.

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• Auditor General, Chairman of the NRF Board of Directors, Chartered Accountant, Chris Ram, Deodat Sharma, Major General (Ret’d) Joseph Singh

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