My friend Suresh said, “There are not enough ‘cuss words’ to describe the treasonous oil contract signed by the PNC” and which the PPP vowed they would not renegotiate. The Exxon Head had said that at election time, both parties promised they would not renegotiate the contract. That puts the oil companies, PNC and PPP on the same side versus the people of Guyana. When I saw the news of that poor man’s house at Bonasika that collapsed and killed his wife and child, I was quite upset, as most of you were. Why do our poor people have to live in such squalor, while the oil companies and their shareholders are dancing all the way to the bank with barrels full of money they made from the oil owned by the people of Guyana. Is the Government not ashamed to say we are a “rich nation of poor people.” Who made it like that? The people or the politicians who take turns to rape the country’s resources?
What is more outrageous is the recent news that the Auditor General’s report found that Oil companies in the Oil and Gas Sector applied to reclaim US$20M for VAT refunds from the Guyana Revenue Authority (GRA). The refunds are for the year 2020 amounting to $3.757 billion. These are claims from 61 companies in the oil industry. The big oil companies (Exxon, Hess, CNOOC) pay no income taxes or corporation taxes. Yet the Government issues Tax Certificates to them, pretending that they pay taxes, and those Tax Certificates may make Exxon and Hess eligible for tax credits from the US Government. The Guyana Government, which says it will be transparent with the Natural Resource Fund, has so far refused to release information on these tax certificates issued as requested by the Oil and Gas Governance Network about 6 months ago. Last year, the Government collected G$4 billion more in taxes than expected. The Guyanese people are taxed more and more, but oil companies are collecting more and more VAT refunds. People, does that make sense to you?
So nation, the big oil companies get the bulk of the money – 85.5% of the gross income from oil, while Guyana gets 14.5%. And now 61 oil businesses are getting almost US$20 million in VAT refunds and waivers. This money can pave all our roads in Whim and in the Whim-Bloomfield NDC, and fix that terrible Parika to Hubu Road. It can also buy more heart machines like the one burnt in the recent fire, buy medicines for our clinics and hospitals, provide dialysis centres in each region, and help people such as the poor Bonasika family where the house fell and killed the woman and her child.
Nation, are we running an oil business or an oil charity for rich oil companies and oil-related businesses? Is this not like a reverse Robin Hood programme where we rob the working poor of Guyana and give the loot to the rich oil barons and their associates with oil businesses? And the politicians get their cut too for conspiring to oppose renegotiation of the oil contracts?
GRA Commissioner Mr. Statia cautioned that a, “significant increase in (VAT) exemptions is expected in the coming years, owing to the burgeoning Oil and Gas sector, and unless policy changes are effected, exemptions are expected to grow exponentially as the industry develops and matures, and in particular, if the Production Sharing Agreements (PSAs) for other blocks have similar provisions for exemptions.”
I call on the Government to end this corporate welfare of waivers and exemptions on VAT. Local companies are paying VAT so why should we subsidize their competitors to the tune of almost G$4 billion. Nation does that make sense?
Sincerely,
Dr. Jerry Jailall