Dear Editor,
Guyana still has to contend with the phenomenon of our Government’s signing away billions of dollars in income taxes to some of the world’s wealthiest corporations, and agreeing to foot their income tax bill for them. Based on new information published on your website on August 02, 2019, we have estimated the amount of losses Guyanese can expect under the current Production Sharing Agreement with contractors Esso, CNOOC/Nexen and Hess. It should be noted here our losses are derived from two instances: These contractors not paying any income taxes, and the people of Guyana with the Minister acting on our behalf, having to pay the value of these outstanding taxes for the contractors, as stipulated in the Production Sharing Agreement (PSA).
Based on recent information, Guyana should have been receiving US$56.681 billion, inclusive of the US$10.9 billion in income taxes the PSA contractors should be paying, but are not. However, Section 15.4 (a) of the PSA also stipulates that the Minister pays these amounts to the GRA as income taxes on behalf of the contractors.
Therefore, if all revenues under the existing PSA were to be paid into our Natural Resource Fund, Guyana stands to lose a total of US$21.863 billion, since instead of US$56.7 billion which would have included the US$10.9 billion in income taxes due from the PSA Contractors, the Fund will now only receive US$34.8 billion, because according to the PSA, the Minister has to pay the US$10.9 billion income tax liability on behalf of the contractors.
Since around 1997, Guyana has been having some serious concerns regarding the nature of contracts signed by our governments regarding the net benefit Guyana receives from the exploitation of our natural resources. With Bai Shan Lin dominating our headlines immediately prior to 2015, this most recent Production Sharing Agreement is something we need to seriously think about as we decide about selecting our next, and future governments. Because without a doubt, we will be responsible for any and all contracts signed by the governments we vote into office.
Yours faithfully,
Craig Sylvester
Party Leader, Democratic National Congress
