PW
Español

 

PW
Guyana
Surinam


PW
Trinidad

& Tobago
Caribbean

 

Prices
Graphics

 




Very usefull links



PW
Bookstore





Blogspots

The Global Barrel

Tiempo Culural

Gustavo Coronel

Iran Watch.org

Le Blog des
Energies Nouvelles

News Links

AP

AFP

Aljazeera

Dow Jones

Reuters

Bloomberg

Views and News
from
Norway

 

PW
Bookstore

 

 

 

Guyana’s payment of ExxonMobil’s taxes will be equivalent to 2021 budget – Int’l Financial Expert

 

 

 

By Kaieteur News

GEORGETOWN
Petroleumworld 09 30 2021

According to the Stabroek Block Production Sharing Agreement (PSA), the Government of Guyana has agreed to exempt ExxonMobil and its partners, Hess Corporation and CNOOC Petroleum Guyana Limited, from the payment of several taxes such as Capital Gains Tax that other local companies are made to pay. And in the instances where the government has agreed to accept the payment of taxes, it has chosen to pay same on behalf of the oil companies.

By 2025, such an unbelievably sweet tax deal will cost the Guyanese people US$1.7B—the equivalent of its 2021 national budget.

This shocking revelation was made in a recent report by the Institute of Energy Economics and Financial Analysis (IEEFA), and its Director of Financial Analysis, Tom Sanzillo. This latest report examines the impact of the exorbitant tax concessions and waivers given to ExxonMobil and its partners.

In his report titled: Guyana’s Tax Giveaway: Country Pays Exxon, Hess and CNOOC’s Annual Income Taxes, Sanzillo was keen to note that the PSA establishes that income gained by the contractor and the other parties is taxable but would be handled by the Minister of Natural Resources. The tax would be paid over to the Guyana Revenue Authority (GRA) from Guyana’s share of the oil money, following which, the oil companies would receive a receipt stating that the said tax was settled. This would be presented by the oil companies to the American tax authorities to prevent being taxed on their profits which are shipped from Guyana to their head offices.

Sanzillo estimates that Guyana may receive annual oil payments that amount to approximately US$6.8 billion in pre-tax revenue from 2021 to 2025. But of this amount, US$1.7B accounts for corporate taxes Guyana will pay for ExxonMobil and its partners.

“Using the current tax corporate tax rate of 25%, the Minister would be required to pay at least 25% of this amount, or US$1.7 billion,” he calculated.

Sanzillo pointed out that corporate tax concessions can be useful if the country granting them derives some benefit from them, but this cannot be said of Guyana’s agreement with ExxonMobil.

“This tax giveaway is just one more way that the public is being shortchanged,” he noted, adding it is one that is also “unnecessarily burdensome for Guyana.”

Further to this, Sanzillo drew attention to the “unwillingness” of the current administration to make public, the full details regarding tax compliance and payment, citing that it raises “even more questions about the fairness of this deal.”

And while the government under the leadership of President, Irfaan Ali, pledged on numerous occasions to be transparent about the details of the oil sector, many questions are still left unanswered.

IEEFA plans to publish additional details and analyses of contract provisions that benefit the companies at the expense of Guyana’s fiscal health.

_____________

TOP

                                                                                                                                                                                                                                                                                                                                                                                             Contact: editor@petroleumworld.com,


Editor & Publisher:Elio Ohep /
Contact Email: editor@petroleumworld.com

CopyRight © 1999-2021, Elio Ohep A. - All Rights Reserved. Legal Information

PW in Top 100 Energy Sites

CopyRight©1999-2021, Petroleumworld   / Elio Ohep - All rights reserved

This site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission fromPetroleumworld or the copyright owner of the material.