November 2, 2020 Read More →

ExxonMobil deal short-changing Guyana taxpayers

Kaieteur News:

Instead of allowing ExxonMobil and its partners, Hess Corporation and CNOOC/NEXEN to pay their fair share of Corporate Income Taxes (CIT), Guyana has agreed to pay same on behalf of the contractor from its share of oil profits. In other words, if Guyana gets $50 in profits and the taxes to be paid to the Guyana Revenue Authority (GRA) amount to $20, it means that Guyana has only gained $30 in profits. If Guyana did not agree to such a provision in the Production Sharing Agreement to begin with, it would have walked away with a total of $70.

Upon taking note of this, Tom Sanzillo, Director of Finance at the Institute for Energy Economics and Financial Analysis, told Kaieteur News that the public is essentially being shortchanged when the government pays the income taxes for the company. Sanzillo also expanded on the net effect of this provision to Guyana in a damning report titled, “Guyana’s Oil Deal: Promise of Quick Cash Will Leave Country Shortchanged.” In the report, he sought to show just how much Guyana is losing by opting to pay the taxes for the Stabroek Block consortium. 

Sanzillo who has 30 years of experience in public and private finance, noted that in a five-year-period, ExxonMobil would be walking away with US$653M which it should have paid in taxes. He said that based on his calculations, this is what Guyana would be paying from its share of the profits. 

[Staff Report]

More: Exxon, partners will walk away with US$653M in waived taxes by 2025

Posted in: IEEFA In the News

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