Senior Minister within the Office of the President with responsibility for finance, Dr. Ashni Singh announced yesterday (Wednesday 26 January 2022) during his presentation of Budget 2022 that tax disparities between local and foreign companies will be addressed, as government seeks to introduce a number of measures to this end.
According to Dr Singh, these measures “will help improve the competitiveness of Guyanese companies, help secure business opportunities for them, and thereby create jobs for Guyanese nationals”.
Building upon the Local Content Act which was passed in December, Dr Singh was keen to note that the government will address the disparities caused by certain tax concessions granted to foreign companies by providing similar ones to locally based companies who, within these incentives, will continue to struggle to compete against their foreign counterparts.
In this vein, Dr Singh stated that, “when we were considering the Local Content Act, one of the recurring issues that arose was the question of ensuring that Guyanese businesses are not in a disadvantageous position relative to their international counterparts in competing for contracts with the oil and gas sector. This could arise, for example, where the sector is procuring a service and the international companies tendering to supply that service enjoy a particular tax treatment on the importation of their capital equipment to provide that service that Guyanese companies might not enjoy.”
Whilst Vice President, Dr Bharrat Jagdeo is cognizant of the liberal nature of these tax concessions, he has also stated that the government will seek to reel in the same when it comes to granting licenses for future operations. Until then, these measures are expected to cushion the additional costs borne by local companies.
