The Guyana Extractive Industries Transparency Initiative (GY-EITI) report has recommended that confidentiality restrictions be amended to enable the comprehensive recording of revenues from the extractive industries.
In its first report issued recently, the GY-EITI urged that government amend Section 23 (1) of the Revenue Authority Act (1996) and Section 4 of the Income Tax Act (1929) to allow for information required for EITI reporting to be disclosed to the Independent Administra-tor. The report was prepared by BDO LLP and submitted to the National Secretariat last month.
Regarding waiving legal confidentiality restrictions, the report observed that in accordance with Section 23 (1) of the Revenue Authority Act (1996), and Section 4 of the Income Tax Act (1929), the Guyana Revenue Authority (GRA) is not allowed to disclose information on individual taxpayers.
It added that given the confidentiality terms, GRA confirmed that it received revenues from 545 taxpayers operating in the extractive sector without disclosing their identities.
“We understand that GRA’s recording system is not integrated with that of GGMC [Guyana Geology and Mines Commission]. As a result, there is a risk that the statement of GRA’s revenues included payments that are not from the extractive sector and which should have been excluded from the scope of the EITI report,” the document explained.
It added that given the lack of Tax Identification Numbers (TIN) and the identity of the taxpayers in GRA’s statement of revenues, they were unable to match the list of taxpayers with that of the licence/permit holders in order to ensure the comprehensiveness of the extractive revenues collected by the GRA.
As a result, the total revenues recorded by the GRA as being collected from the extractive companies may exclude several taxpayers operating in the extractive sector and which make material payments to the government, the report said.
It further explained that in order for them to overcome the legal confidentiality constraints during the EITI reconciliation, extractive entities were asked to sign waivers to allow the GRA to submit reporting templates. GRA was then able to submit reporting templates for six extractive entities and not for the remaining 23 retained in the reconciliation scope.
The revenues declared by the GRA in the 10 reporting templates submitted, amounted to $2,702,769,995, which represents only 41 per cent of the revenues estimated to be collected by GRA from the extractive sector.
As a result, the report recommended that the government amends Section 23 (1) of the Revenue Authority Act (1996) and Section 4 of the Income Tax Act (1929) to allow for information required for EITI reporting to be disclosed to the Independent Administrator.
“In the shorter term, GYEITI must also set out an adequate timeframe for the reporting process including selection of reporting entities and submitting signed waivers by the extractive entities in order for GRA to have reasonable period of time to consider them,” the report added.
It also implored that there be use of unique identification numbers for all government agencies and recommended that government agencies collecting revenues from the extractive industries, in particular, the GGMC and the Guyana Gold Board, revise their reporting system in order to include TIN when recording receipts.
“The statements of revenues of government agencies should include a unique identification number such as TIN rather than using names or different reference numbers for identifying payers. This would lead to an efficient tracking of receipts and ensure harmonisation of databases of different tax authorities,” it explained.
The report also recommended the mainstreaming of open data for EITI, for better reporting at project level, an increase in the accuracy of export data, and for changes to be made as it relates to public disclosure of a register of licences, public disclosure of mineral agreements, allocation of licences and permits, accuracy of production data, legislative reforms in the oil and gas sector, organisational structure of the GGMC and data quality and assurance.
The report covers payments made by extractive entities and revenues received by government agencies and other material payments and benefits to government agencies as required by the EITI Standard 4.1.
It also includes contextual information about the extractive industry in accordance with the EITI requirements and includes a summary description of the legal framework and fiscal regime, an overview of the extractive industry, the extractive industry’s contribution to the economy, production data, the State’s shareholding in extractive entities, revenue allocations, licence registers and licence allocations.
