Govt formalises tax waivers for oil giant, partners

Written by : , Category : jpphelgn , Date : January 12, 2020 , No Comments on Govt formalises tax waivers for oil giant, partners

first_imgSeventeen years after the first oil exploration agreement was signed with Esso Exploration and Production and partners, Government has formalised all applicable tax waivers from which the entity and its partners will be benefiting.This was obtained when Finance Minister Winston Jordan presented for the House, the Order for affirmation by Members of the National Assembly.Finance Minister Winston JordanThe Order formalising the waivers relate to the relevant corporation, property, corporation and other taxes.Jordan, in presenting the motion to the House for a vote, said it was nothing new or isolated to the current Administration and pointed to previous similar orders issued in relation to other exploration companies such as CGX Resources.Speaking to the importance of, and the need for, the tax waivers to be granted to the oil giant and its partners, Minister Jordan pointed out that oil exploration is an expensive business, requiring significant levels of investments before any returns could be had.He said, in order to encourage companies to remain engaged in oil exploration in Guyana, concessions were given over time and companies have been seeing promising results.Jordan drew reference to the more than 1.4 billion barrels of crude oil estimated to be found in the reserves. According to Jordan, the discovery of oil “has created excitement at home and abroad.”He posited that everyone recognises that once managed with prudence, “the financial windfall will create the fiscal space we crave for the rapid development.”As such, the Order formalising the tax waivers are important to provide investors with the necessary comfort required by its shareholders and directors that the agreement with the Guyana Government remains unaltered.“We will continue to do our part to improve the business climate,” he said.He pointed to the fact that the oil company has secured an extension of its exploratory permits warranting the need for the formalising of the tax waivers as provided for under Guyana’s Petroleum Laws.The motion was eventually unanimously supported by all members of the House, but not before some Opposition speakers expressed reservations about the process used to bring the motion to the House.Chairperson of the Standing Parliamentary Sectoral Committee on Natural Resources, Odinga Lumumba, informed the House that he was unaware of the motion being brought to the House for approval.He told the House while oil could serve as a significant boost for the Guyanese economy, it could also be equally detrimental and as such, “we can’t carry on like this in this country… we have to be careful, we have to work together… what is the problem; why the secrecy?”Lumumba said the relative secrecy with which the motion was brought to the House “makes us feel as if there is a hidden agenda.” “We cannot embrace the future of our country in secrecy, in darkness, we have to do it in the light,” he noted.Oil, he reminded, can lead to destruction, “it has destroyed several countries, and therefore we have to work together.” Substantive Minister for the oil sector, Natural Resources Minister Raphael Trotman, sought to assure the House that there were no sinister motives afoot.In fact, Trotman told the House there was no disrespect meant to members of the House or the public at large and that there is “an entitlement to know what is happening.”He used the opportunity in his presentation to update the House on a number of bilateral engagements with the US Government, the European Union and the Canadian and Mexican administration, among others.These engagements, he said, have led to outreaches such as the provision of scholarships for Guyanese students wanting to study in that field, in addition to the establishment of the Sovereign Wealth Fund.He said too that the Norwegian Government has also expressed an interest in assisting Guyana in addition to pledged assistance from the Commonwealth Secretariat.Minister Trotman informed the House too that the University of the West Indies (UWI) has also been engaged.In calling for the support of the House, Minister Trotman recalled that ever since the agreement was first signed in 1999, this is the first time the order formalising the tax waivers has been brought to the House and is in fact, “many years overdue.”Opposition Chief Whip Gail Teixeira, in her contribution to the short debate, told the House that while they are eagerly awaiting the realisation of the prospects of oil but the Opposition would have wanted to be privy to the Order at an earlier time, since it would have liked to been more prepared for such an important debate.She told the House that the Opposition was essentially being asked to support tax waivers, but there was no indication as to how long or even the quantum of waivers that would be applicable.The motion was nonetheless approved by all members of the House.The tax waivers addressed in the Order, as presented by Minister Jordan, relates to the applicable section of the Income Tax Act, the Income Tax in Aid of Industry Act, and laws relevant to Corporation and Property taxes.last_img

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