Dear Editor,
There is an important corruption driver in Guyana. It is the missing corporate tax revenue unavailable to pay public servants, teachers, nurses, doctors, all hired in the public sector. Government as specialist in administering a key function could be prodded toward corruption in a land laden with natural resources, but cursed with an unfair contract, widely accepted by Government but shielded with a notion that zero taxation is in its own interest in a business contract. Worse, where the contract that is signed by diktat secures tax advantages amounting to international tax evasion.
Indeed, where a poor country surrenders its right to tax under its own national tax laws in favour of a multinational business contract, Guyana is called upon to calculate and pay its own corporation tax due and issue tax receipts as if the taxes were actually paid. The US Foreign Tax Credit (FTC), allows multinational companies to claim a FTC, that is cash like US child credit, as money in the bank. If all the Laws of Guyana were operating in its favour, including the rich countries’ international windfall 15 percent tax, local corruption would be uncalled for.
Guyana is now considered a high income country according to World Bank classification. In 2022, Guyana’s Gross National Income per capita was US$15,050. Multinational companies may evade taxes on their profits from resource extraction and get away with it overtly. This can deprive resource-rich countries of much-needed revenue. See, https://datahelpdesk.worldbank.org/knowledgebase/articles/906519-world-bank-country-and-lending-groups.
Zero taxation is a corruption driver in resource-rich countries. Such corruption can have a devastating impact on economic development, leading to environmental degradation, and perpetuating poverty on Guyana, some 48 percent according to a Washington Bank source.
Sincerely,
Ganga Persad Ramdas
Former Division Chief
Bank of Guyana
