The oil and gas sector saw a tax exemption of $ 125.8 billion in 2019 – PE report
─ Billions in VAT refunds
Kaieteur News – The oil and gas industry received tax exemptions totaling some $ 125.8 billion for fiscal year 2019, Auditor General Deodat Sharma has revealed in his annual report.
The exemptions were granted through the Guyana Investment Office (Go-Invest) and the Guyana Geology and Mines Commission (GGMC).
Examining the Guyana Finance Authority (GRA), the report recently presented to the National Assembly also showed that two companies opposed assessed taxes totaling $ 265.626 million.
Further, the report noted that requests for VAT refunds from companies in the oil and gas sector for 2019 amounted to some $ 2.422 billion. At the time of reporting in November 2020, VAT repayments totaling $ 280.952 million were made to one company, the report highlighted.
Sharma said VAT returns totaling $ 8.018M were rejected; No VAT refunds totaling $ 26.792 million were allowed, while $ 2.1 billion in VAT refunds were processed by the GRA.
Recently, Vice President Dr. Bharrat Jagdeo said the funding regime of the Sharing Production Agreement (PSA) between the Government and US oil company ExxonMobil was too liberal and disadvantaged the country.
The PSA, signed in 2016, states that “no tax, value tax, customs tax, tax, fee, charge or other impost shall be charged on this date or from time to time on the Contractor or Affiliated Companies in respect of income arising from Petroleum Operations or in respect of any property held, transactions carried out or activities carried out for any purpose authorized or contemplated hereunder. “
“All tax concessions are incorporated into the PSA. It’s almost as obvious that when a tax liability falls on the company, the Government often has to pay. So much of the leverage in relation to the oil companies comes from the PSA, ”the Vice President said during a recent interview.
Dr. Jagdeo that many subcontractors employed by Exxon also benefit from tax cuts that the “local guy doesn’t get.”
The Government has already made it clear that the current PSA is only about the Stabroek Block, and that future oil companies interested in oil production here will be subject to different guidelines, which will correct the deficiencies in the present agreement. (DPI)