…as he calms business community’s fears
With oil production to come on stream in two years’ time, Guyana Revenue Authority (GRA) Commissioner General Godfrey Statia has assured the Private Sector that the Authority was making every effort in preparation for first oil.
Addressing the gathering at the 26th Annual General Meeting (AGM) of the Private Sector Commission (PSC) on Thursday, Statia sought to allay certain fears expressed by the business community, saying that notwithstanding the various challenges and risks associated with Guyana’s newfound oil sector, the GRA was building capacity to ensure that taxpayers pay their rightful taxes and the contractors in the oil industry were no exception.
“…With the right tools and attitude, the officers of the GRA should ensure that this vital resource contributes its rightful share to the coffers of Guyana. Despite the gloom and doom and pessimism expressed by numerous persons and many experts in the field, the GRA, which is the premier tax collection agency in Guyana, has embarked on a programme to ensure that Guyana benefits from every activity associated with first oil, be it at the upstream, midstream or the downstream,” Statia noted.
While distancing the Authority from the process of determining what fiscal tools were used and how they were applied to particular oil and gas projects as part of the country’s legal framework, the GRA boss posited that Government, while it may have preferences, must also respond to the needs of the companies if the State wanted to attract and sustain Foreign Direct Investment (FDI).
“Further, the uniqueness of petroleum taxation, when compared to the taxation of other goods and services lie in the industry’s special characteristics – its contribution to national economies, the high operating and development costs, high uncertainty in exploration activities, the volatility of oil prices, the inability of Government to fund its own exploration, the political and economic climate, and hostile neighbouring countries who harbour territorial claims which allow for increased risk, are all factors that warrant the demand for a higher rate of return by investors,” Statia asserted.
Given the impending development and expansion Guyana is about to experience, Statia nevertheless posited that neither the Private Sector, Public Sector nor Government could ignore each other’s role in using the newfound resource for national development.
“While the Private Sector can be the engine of growth, innovation and job creation, Government’s efforts to establish stable and supportive environments are also critical. The bottom line is clear: an array of actors is lining up to realise Guyana’s first oil era, and everyone has a role to play,” Statia noted, adding that such collective and interconnected actions were destined to achieve broad national development for the country and its people.
Moreover, the Head of the tax collection agency went on to note that having recognised that the GRA lacked the optimal capacity to fully scrutinise the oil industry, it has sought international assistance to learn from the experiences and best practices of other countries, so that Guyana understood the financial, technical, and socioeconomic challenges that emanate from the oil industry.