Guyana’s Wealth Fund’s stability hinges on slippery unknowns

Mr. Editor,

Guyana’s tax liability of $ 5.391 billion for oil contractors is an outrage. Instead of guaranteeing funds for flooding, sea defenses and compensation to farmers for crop losses, money deposited with the New York Federal Reserve must now be used to pay Guyana’s tax bill, a situation which will reduce Guyana’s oil share below 12.5%; 50/50 share as stated in the agreement. This 2016 petroleum agreement contains indefinite provisions well beyond the annual recovery of capitalized costs of 75% each year, with additional provisions for the carry-forward of losses plus undisclosed amounts or exploration costs of previous year unaudited; very slippery unknowns. There does not appear to be any certainty as to the stability of the Guyana Wealth Fund with the unlimited cost recovery nature.

As a set of industrial and financial activities for the exploitation of natural resources outside of Guyana’s budget, these should be scrutinized by the Guyanese Parliament with full responsibility, as these transactions are fed into the national budgeting system. and accounting for chiefs and sub-chiefs. subsidies to oil companies. I firmly believe that the 2016 contract itself is flawed as it transfers Guyana’s wealth which benefits the parent companies of the oil entrepreneurs, their buddy-subsidiaries and their shareholders by using Guyana’s tax laws, without debate. parliamentary. The Guyanese public and the diaspora are looking for information, especially on the production and exports of the oil industry. One wonders what figures will enter into the National Gross Domestic Product.

A country that does not respect its own laws is likely to encourage widespread tax evasion and lawless behavior elsewhere, from top to bottom. My recommendation is that Guyana’s 50/50 production share be kept at the same level as Esso’s share, a company that has no country to manage or develop, and include the tax liability of Guyana in cost recovery capitalized at 75 percent each year. These amounts are not even the rounding error of an item in the financial statements of the giant oil multinational.

Truly,

Ganga Persad Ramdas

About Larry Noble

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