By Suraj Narine
The Guyana Revenue Authority (GRA) is in the process of building a proprietary database so that it can be in the best position to detect overstated costs by companies in the oil sector. Making this known to the Guyana Standard was GRA Commissioner General, Godfrey Statia.
The tax chief said that the authority would be receiving the help of international experts, specifically IHS Markit Limited, a London–based global information provider formed in 2016. This company also won the contract to review Guyana’s pre-contract costs which are contended by some to be more than US$460M.
The GRA Commissioner General said, “I have said before that when it comes to identifying inflated costs, there are no shortcuts. Many countries encounter issues with this, they struggle with it…But we will be on the lookout for inflated costs with the use of benchmarks. We are building a proprietary database because we know all the items being utilized in the sector and even those being leased.”
The Commissioner General said that the international price benchmarks will also be used to avert other issues like transfer pricing which involves purchasing from one company or selling to related parties at artificially high or low prices to shift taxable income out of the hands of the host country.
Statia said, too, that GRA will be on the lookout for profit-shifting. This takes place when companies employ strategies to shift profits they make in countries with high taxes to offices it has in other jurisdictions where lower taxes would be paid.
He added, “So those are some of the things we will be looking at along with Cost Oil and related party transactions to see if the interest rates being used are above market rates.”
