Lack of information from Govt. agencies stymies oil sector inspections – GRA – Kaieteur News

Lack of information from Govt. oil sector exploration stymies agencies – GRA

GRA Commissioner General, Godfrey S. Statia.

Kaieteur News – It was in September 2019 that the Guyana Finance Authority (GRA) implemented the Petroleum Revenue Audit Department (PetRAD). That department was set up to serve two main purposes. The first was to ensure that taxes are administered within the petroleum sector through the performance of revenue compliance activities to ensure compliance with Guyana’s tax and petroleum laws and regulations, as well as Production Sharing Agreements (PSAs). The second purpose was to ensure that Cost Recovery Audits were implemented with the aim of verifying the expenditure claims of contractors committed to PSAs with the government.
Despite its best efforts to achieve those goals, GRA noted in its 2015 to 2020 Transition Report that PetRAD’s work was hampered by many challenges. Chief among these was the failure of all associated Government Departments to sign a Memorandum of Understanding (MoU) governing the sharing of relevant information. Kaieteur News understands that this has significantly hampered the authority’s ability to access the documents needed to plan all Costs and Tax Recovery Audits, as well as adopt more proactive up-to-date audit techniques.
In addition, GRA noted the inability to manage the timely achievement of auditable and allowed the Cost Recovery Audit to be conducted jointly by the three Government Agencies.
Another huge barrier was the selective interpretation of the PSA and legislation by International Oil Companies and Service Providers. Given that the Oil and Gas Sector is in its elementary phase, GRA said that most terms within the PSA and the legislation are subject to interpretation. This must be read and interpreted carefully and promptly, which is time-consuming as the result of these inaugural activities would set precedents in this growing sector, the tax body said.
In addition, GRA said that the Petroleum Revenue Audit Department’s supply has expanded to 14 officers since its inception. He noted, however, that the further expansion of the department was being hampered by inadequate accommodation. Kaieteur News understands that infrastructure work is currently underway to facilitate the co-option of some additional resources other than the repository at present.
Of the 14 officers, GRA was keen to point out that only 11 are directly involved in carrying out Audits. In addition, each of these 11 officers is officially assigned to the Tax Audit Division. The only appointed member of the Cost Recovery Audit Division is the Assistant Commissioner.
GRA said that a project team, consisting primarily of PetRAD Managers, had been formed to facilitate the implementation of the first Cost Recovery Audit. He noted, however, that strategic decisions needed to be made as it related to the operation of the Cost Recovery Audit Division and by extension deploying staff to serve in the Division.