GRA to audit Exxon
Commissioner-General GRA, Godfrey Statia
Commissioner-General GRA, Godfrey Statia

– Special oil-and-gas tax unit staff being trained

THE Guyana Revenue Authority (GRA) has notified United States (U.S.) oil giant ExxonMobil of its intention to begin auditing the company’s operations, Commissioner-General Godfrey Statia told reporters on Tuesday.
Statia’s announcement comes at a time when the Authority is preparing staff for its soon-to-be-created Oil and Gas Unit. The creation of the unit is also coming just about a month after renowned economist, Professor Sir Paul Collier, had urged government to build capacity to scrutinise the taxes Exxon pays.

“Don’t assume that you can just trust them to pay the right amount,” he had warned during an engagement with members of the media. “Build a specialist team in monitoring,” he said, citing the example of Norway which has a team of 40 tax revenue collection professionals. “You don’t need as many as 40, you need some, who can learn gradually the intricacies of the industry,” he said.

Meanwhile, Statia disclosed that training for GRA staff will begin next week while noting that by 2021, he expects the Oil and Gas Unit to be staffed with approximately 100 persons. “We have already notified Exxon of our intention to commence certain audits and that is exactly where we are,” Statia told reporters at a press conference while making it clear that the audits would focus not only on revenues but also on assets, expenses, and likely per-wells.

The GRA head made it clear that as the need arises the aforementioned audits will be done. He said too that his entity has to take steps to maximise its taxes, noting that the audits would be done not only on ExxonMobil but also on their contractors.
“When we are looking at oil and what we get from oil, we don’t look to see the taxes that we are going to get from contractors, the economic activities we will get from mid-stream activities. These are some of the things we need to put our minds to. We need to look at all the other avenues where we are going to get taxes,” said Statia.

Statia pointed to reports of oil-producing companies in Trinidad and Tobago that are headquartered in the United States or Canada establishing subsidiaries in other Caribbean countries which are covered by the CARICOM Tax Treaty, thereby avoiding withholding tax on dividends and interest.

As a result of the aforementioned, Trinidad and Tobago loses approximately $200M annually. “I would like to say that if that occurs here, it would not be under my watch. It means that the tax officers were not doing their jobs properly,” the GRA head stated while stressing that there is need for vigilance.

“You have to be able to pierce all of these veins if you have the correct staff doing your review, audits and investigations. You ought to be able to trace where the money ends up,” he posited while noting that Guyanese taxpayers have been guilty of similar acts.
He said oil companies have been part of inter-company transactions since the 1970s while quickly pointing out that developing the skill set here of auditors is critical to curbing such acts. “What we lack is the people who have the competence to go and find these additional taxes, and that is what we are trying to do; equip our staff so that we would be in a position to find it,” the Commissioner-General said, while adding that sometimes desk audits produce more revenues that going on location and doing an observation.
“You don’t have to be measuring barrel for barrel to do a proper audit of any oil company. There is adequate software to trace the funds all over the world. It is that we are not equipped as yet to do so,” he stated.

ACCESS TO INFORMATION
Meanwhile, the tax boss stressed that access to information is critical to his entity’s job and noted that as the required information becomes available his entity will conduct its checks and balances. “You cannot wait until the end of the period within which you are going to start an audit. I won’t say an audit … a review should be continuous. You should have persons on the spot specifically trained in these activities.”

He estimates that based on the latest estimates by the Ministry of Finance, during the first year of oil production some US$700 is likely to be pumped into the local economy. “…And don’t forget when we look at our taxes, GRA is probably set to collect for the first time US$1B in taxes from the entire country,” Statia stated as he stressed the need for adequately-trained personnel in the Oil and Gas Unit.

He explained that there would be a need for a technically diverse staff which includes engineers, geologists as well as lawyers. The Commissioner-General disclosed that his entity would be sending eight persons to England to pursue studies in oil and gas. “We are trying to be in the forefront of it instead of waiting on the other departments,” he stated.
Statia also disclosed that Monday’s training is to be facilitated by a technical assistance group from the U.S. which comprises retired Internal Revenue Service (IRS) officers. IRS is the revenue service of the United States federal government. The Commissioner-General disclosed that an organisational chart for the Unit has been prepared and advertisements have been placed for suitably qualified persons to join the unit.

In the first instance, we are going to be training internal persons … give them a chance and so those internal persons would begin training from next week. There are certain technocratic positions that we cannot fill such as persons who are fully into petroleum audit and accounting,” he said.

Statia said instead of training his staff for those roles, GRA will employ experienced persons who “could hit the ground running”.

Additionally, several GRA staff will be heading to Trinidad soon to be trained while the British Government has provided a £100,000 grant to assist with training needs. The government of Guyana has also earmarked sums for training in the area of oil and gas.
Ten GRA officers are being trained on board ExxonMobil’s vessels and moreover the Revenue Authority says that it has a continual presence offshore so as to observe the company’s assets that are “going on and moving off”.

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