Dear Editor,
There are many unanswered nuanced questions surrounding the Petroleum Sharing Agreement, PSA2016, and Guy-ana’s budgetary matters omitted in the article SN 2025-01-13, regarding the long-term welfare of the nation.
The contract templates were carried into the new 2016 contract as if the two major parties were in agreement on the new 2016 contract. The 1999 contract, hidden from the public initially, and the controversial 2016 version that is assumed to be signed without outside interference are troubling indeed.
Guyana’s budgetary income taxation is not tied to the actual payment of oil profits taxes into its Treasury. Guyana has no choice but to use up its national savings in its National Resource Fund, NRF as a revenue source, instead of investing its savings for the present and future generations.
Guyana’s ability to maintain a sustainable budget without raising domestic income taxes leaves its future welfare on slippery grounds.
Long term welfare of Guyana is an undefined idea. The population growth required to sustain 30 to 40 percent economic growth rate will be more than double the available census record data, about ¾ million people. What will be the level of domestic income taxation required to balance Guyana’s current plus capital expenditures without overseas Household Remittances? Will the tax burden at zero rate for oil companies be shifted to Guyana’s Households and Business sectors?
Or will future welfare be dependent on Overseas Borrowing and debt? These are nuanced questions that Dr. Paul needs to address.
Overall; was there a fear factor at the time of signing PSA2016 or an external inducement factor – not a business contract factor? The entire contract needs to be renegotiated in order to reflect economic reality and safeguard Guyana’s future.
Sincerely,
Ganga Persad Ramdas