Dear Editor,
It is estimated that Exxon’s effective tax rate for global operations ranges between 20% and 30%; and per their annual report their worldwide effective tax rate has been 33% for the last 3 years. Guyana should establish a corporate tax rate for the company to pay taxes directly to the nation without the use of a government tax waiver or a tax credit.
The corporate tax rate should match their worldwide three-year running average effective tax rate or their three-year running average effective tax rate for their global operations with preference being given to the lower of the two.
CRG considers this to be a fair way of dealing with the tax leakage currently occurring in the sector, and per the production sharing agreement there is an opportunity to renegotiate this matter when one considers the length of time of ExxonMobil’s offshore operations in Guyana.
This will help address the concerns of the electorate and allow both the government and Exxon to save face while solidifying our relationship in the sector. If Exxon considers this a non-starter for renegotiation, the current administration must reconsider our nation’s relationship with ExxonMobil and begin discussions with BP and other major companies in the sector.
Given the current market conditions due to the war in the Middle East, China and Europe are currently looking for additional options and would welcome an opportunity to further participate in our lucrative, and relatively safe oil & gas sector.
The word “reconsider” does not mean breach of contract, but it does mean that the preferential treatment, considerations, and practices currently in place with Exxon as a preferred partner must be relooked at in terms of the exclusivity provided and depth of integration within Guyanese society.
A true partner and guest within our nation would appreciate and welcome the opportunity renegotiating provides so they may deal more even handedly within such a lucrative sector and reap additional benefits over the long term.
If Exxon persists in not coming to the renegotiation table, new partners for long term sector development must be pursued and established with a sense of urgency to better secure the viability of our nation’s purse. Our nation is well positioned next to a country with the largest proven oil reserves in the world and it should be clear to everyone interested in the sector that oil does not limit itself to the borders created by governments.