Ghanaian businessman, Kwame Jantuah, is the most recent person to join calls for local companies to be given first consideration for duty free waivers which will to help them be more competitive with foreign businesses operating in the local market.
Ghanaian businessman, Kwame Jantuah
Jantuah, CEO Africa Energy Consortium recently made a presentation on
local content policies at the Guyana International Petroleum Business
Summit and Exhibition (GIPEX) 2019 held at the Marriott Hotel last week.
Sharing his views on the local content, Janutauh noted that the oil and gas industry is big enough to take care of everyone if local content is practised in favour of the people and there is trust, transparency and accountability.
Above all, Janutauh stressed the long term national development plan must help increase the country’s revenue equitably.
The businessman added, “There should be deliberate action where local companies should be given the first consideration of refusal, duty waivers to help build their capacity…”
The Ghanaian businessman’s appeal comes months after Commissioner General of the Guyana Revenue Authority (GRA), Godfrey Statia, made a request for local companies being given a fair opportunity to compete alongside foreign enterprises for contracts to supply goods to the oil sector.
The Commissioner General revealed that locals will be given tax breaks on those supplies being imported for the industry.
Statia noted that he is aware of the Kaieteur News article which highlighted that the subcontractors for ExxonMobil as well as its affiliated companies enjoy tax breaks for their imports.
With that in mind, the Commissioner General said he supports calls that Guyanese should enjoy this privilege too.
The tax chief noted however that he is not going to sit around and wait on a policy or piece of legislation to level the playing field.
“We are not waiting for a policy, we are trying to do what we can. We are being proactive,” the Commissioner General added.
Statia said that the only problem he is perhaps fearful of is dual purpose suppliers, meaning those firms which divert the tax free goods that are meant for the oil sector, to other local market streams.
“So you have to devise a way to show that you are importing just for Exxon…There are some firms, you know from their supplies that it is strictly for Exxon’s operations so that is easy.
“They are bringing in specialised equipment and machinery, pipes etc for the sector…But the local companies have to be truthful because if they are caught, that tax break would be removed,” the Commissioner General expressed.
Back in 2016, Trinidadian Local Content Expert, Dr. Anthony Paul, had advised that exemptions for only foreign subcontractors is discriminatory to locals and should be addressed, whether by law or the review of contracts.
In a report that he wrote on the request of the United Nations Development Programme (UNDP), Paul stressed that such exemptions could actually undermine Guyana’s local content efforts.