Posts

Posted on

Property tax regime needs reform and proposed removal should be revisited

Dear Editor,

Mr. Hemdutt Kumar’s letter, “Removal of property tax is a victory for the wealthy and a betrayal of the poor” (Stabroek News, December 20, 2025), is theoretically sound and morally courageous. Predictably, critics will recycle the familiar claim that property tax is widely evaded and difficult to enforce. By that logic, Guyana should abandon almost every major tax. VAT fraud is endemic, income and corporation tax avoidance is widespread, and customs duties haemorrhage daily. Acknow-ledgment of weak enforcement is a call to strengthen administration – not a justification for capitulation.

Before looking at the history of the property tax which President Ali plans to scrap on individuals – ‘to axe the tax,’ as older heads might say – we need to note that “Individuals” in taxation includes professionals, unincorporated businesses, partnerships, and the majority of contractors. This is a huge body of taxpayers. And if the President does keep his promise, retaining it on companies will not have the simplistic effect assumed: all the “one man” and family companies have to do to avoid the remnants of the tax is to de-incorporate.  As was the case with the minimum tax.

Guyana once operated a harshly progressive tax system, with marginal income-tax rates reaching 70 percent, reinforced by the National Development Surcharge Levy (subsequently ruled as unconstitutional by the courts). Over time, that framework has been steadily dismantled. Dividends, then taxable, have been made tax-free, estate duty effectively abolished, capital gain is either exempted or taxed at a lower rate than tax on income. And now, property tax – the last meaningful levy on accumulated wealth – is to be removed.

Guyana’s current $40 million property-tax threshold is already generous by international standards. And in computing the tax payable, full deduction of debts and exempted certain assets is allowed. As Mr. Kumar points out, it already excludes the poor.

Other critics will point to countries that have abandoned wealth taxes. They need to tell the whole story. Where such taxes were removed, wealth concentration intensified. What the tax needs is reform, not abolition – least of all at a moment when oil-driven wealth concentration is accelerating. If the measure is implemented, $2 billion plus will go into the pockets of a not-so-new and rapidly expanding wealth class for whom ‘greed is good’ appears to be the governing mantra, a class that visibly includes ministers, their friends, and their families.

Without more, the repeal would also remove the obligation on taxpayers to itemise and declare their assets, leaving mandatory disclosure confined to income alone. And to make a bad situation worse, the country will bear those consequences through taxation, borrowings and drawdowns from the Natural Resource Fund.

I will be personal and direct. This repeal will save me millions of dollars annually. I do not need it. I did not ask for it, and it will make no difference to how I live. In none of the Budget submissions to which I have contributed over decades did I ever advocate for, or recommend, the removal of property tax. I hope the decision will be revisited. 

The Property Tax was one of the 1962 measures advocated by world famous welfare economist Dr. Nicholas Kaldor and warmly embraced by the late President Dr. Cheddi Jagan in the 1962 Budget. When the last remaining tax on accumulated wealth is removed, the signal is unmistakable. The burden shifts downward. To present this as “relief for all” is shallow and dishonest.

Sincerely,

Christopher Ram

Posted on

The $10 Billion NIS Grant: Compassion or Deception?

Business & Economic Commentary by Christopher Ram

Introduction

This column took issue with the announcement of a $10 billion allocation to the National Insurance Scheme (NIS), the Government’s quick fix to decades of weak supervision and administrative failure dating back almost to the Scheme’s inception in 1969. Now, even the accuracy of the sum is in doubt. In the 2025 Budget Speech, the Government stated that it would be “injecting $10 billion into the Scheme” to provide a one-off grant to persons aged 60 and over with between 500 and 749 contributions.

To the ordinary citizen, that language conveyed that a long-standing injustice had finally been addressed and that the NIS itself was being strengthened after years of failure. The ordinary citizen must be forgiven for believing the country’s First Citizen and accepting his announcement.

But viewed alongside a series of prior assurances – the promise to review and renegotiate the 2016 Petroleum Agreement, the promised cash grant before Christmas, the commitment to establish an Anti-Corruption Unit, and the President’s undertaking to ensure the proper administration of the Access to Information regime – a clear pattern emerges. Language is repeatedly expressed in terms of certainty and resolution, only to be later reinterpreted, repurposed, delayed, or quietly abandoned once its immediate political purpose has been served.

After enough such episodes, these assurances cannot be treated as genuine commitments,  or even as reliable statements of intention. Delivered at moments of pressure and framed to sound decisive, they have repeatedly had the effect of deceiving the public into believing that action would follow, when experience suggests otherwise.

The $10 Billion question 

What, then, does this have to do with the $10 billion “injection” into the NIS?

Appendix C of Volume I of the 2025 Estimates discloses an outward cash flow within the Public Enterprise accounts of the NIS. That Parliament authorised the spending of real money is not in dispute. What is not clear is whether there was any upfront injection at all, or merely authority for payments to be made over time as claims are processed. The Estimates, it seems, describe a payment programme rather than a strengthening of the Scheme.

Given the significance of this much-touted initiative, I sought clarification from the 2025 Mid-Year Report published on November 3, 2025 by the Ministry of Finance, which exercises portfolio responsibility for the NIS. Regrettably, the report was most unhelpful. Making no reference to the $10 billion allocation, paragraph 3.54 stated: “During the first half of 2025, the National Insurance Scheme reported higher collections from contributions of $2.3 billion.” There was no disclosure of how much of the $10 billion had been disbursed, to whom, or by bands.

This omission raises obvious questions about how much of the $10 billion has been paid, how many beneficiaries have received payments, how those payments are distributed across contribution bands, and how the funds are being accounted for. Because the NIS is perennially late in publishing its annual reports –  the most recent available being for 2022 –  the public is left to speculate about matters that ought to be transparently reported.

Pattern of non-disclosure

That distinction matters because the NIS is a statutory social-insurance scheme, funded by compulsory contributions from workers and employers, and governed by legal duties of transparency, reporting, and actuarial oversight. Those duties have been honoured more in the breach than in the observance. Statutory reports have frequently been tabled several years late, depriving the public of timely information on performance, investments, and sustainability.

The consequences are not abstract. In one case, an elderly contributor waited nearly two decades for an appeal to be heard, only for management to challenge the decision again, despite the long-vacant post of National Insurance Commissioner. Such experiences are not aberrations; they are the predictable consequences of systemic dysfunction.

There is a deeper, structural failure. Although the law requires a five-yearly actuarial review, successive governments have failed to address the 2016 actuarial review warning about contribution adequacy, benefit structures, demographic pressures, and long-term viability. 

Systemic and institutional challenges

These failures are rooted in systemic and design weaknesses. The NIS remains effectively controlled by the Government of the day, with ministerial appointment of the Board too often favouring political compatibility over independence or expertise. Without an independent Board, meaningful oversight is weakened and holding management responsible for entrenched inefficiencies becomes almost impossible. 

Equally troubling is the legislative stagnation surrounding the Scheme. The National Insurance Act has remained structurally unchanged for more than half a century, despite profound changes in Guyana’s economy, labour market, and demographics. A social-insurance system frozen in legislative time cannot be expected to function effectively in a vastly changed society.

Management also operates under chronic resource constraints that no serious reform effort should ignore. The NIS today serves a contributor and beneficiary base many times larger than when its staffing levels, systems, and physical infrastructure were designed. Without sustained investment in modern systems and adequate personnel, delays, errors, and backlogs become inevitable rather than exceptional.

Conclusion

Seen against this record of weak governance, legislative stagnation, and administrative incapacity, the significance of the $10 billion grant lies not in its size, but in what it leaves untouched. Effective social security is not measured by the size of a headline figure but by its predictability, fairness, transparency, social awareness, respect for contributors’ rights, and, not least, efficiency. Until the NIS is freed from excessive political control, its legislative and governance framework modernised, is properly resourced both physically and technologically, professionally managed, and subjected to genuine actuarial discipline, these problems will remain and become worse. 

And the question posed by this column remains unavoidable: is the $10 billion grant an act of compassion – or another opportunistic attempt to gloss over the result of a system that those in authority have long neglected?

Posted on

Routledge’s black hole of mysterious tax certificates (part 1)

Every Man, Woman and Child in Guyana Must Become Oil-Minded (Column 171)

Introduction

Readers will recall Column # 170 dealing with the request by three U.S. senators to ExxonMobil seeking information on the company’s tax arrangements under the 2016 Petroleum Agreement. Their direct concern is whether the U.S. treasury is subsidising Exxon’s operations in Guyana to the benefit of CNOOC, one of Exxon’s Chinese partners in the Stabroek Block.

Ever since that letter was made public, interest in the issue has intensified – both abroad and in Guyana. At a press conference held at the Exxon’s new Guyana Headquarters in suburban Ogle, hosted by ExxonMobil Guyana’s President Alistair Routledge – sporting the Guyana Arrowhead – the local media, sensing a story that finally had a Washington connection, pressed for answers.

To a question whether Exxon would provide the information sought by the senators – and long sought by the media in Guyana – Routledge was his typical evasive self. “We haven’t applied any tax credits. We are working with the GRA on paperwork on taxes,” Routledge said – an insult to the intelligence of every Guyanese or person of any intellect. That single sentence has opened a window into what may be the most brazen accounting fiction in the country’s history. Unless there is an intent to cook up something, the claim is neither accurate nor credible. It masks a structure so distorted that even its defenders cannot explain.

Before we analyse his response however, let us look at another statement that is blatantly misleading – that the company continues to be cash flow negative on a cumulative basis. Was Routledge unaware that in 2024, the branch distributed some $674,454 Million and still ended the year with more funds than at the beginning of the year? 

No credit

Back to the press conference and Exxon’s and its tax practices. Unsurprisingly, Routledge tried to dismiss the drawn-out controversy as the product of paperwork. But what paperwork, he did not say. The Agreement could not be clearer. The Minister pays. The GRA issues the receipt. The obligation is discharged. That is the entire mechanism. There is no “working on paperwork.”

There is only doing it or concealing it. If, six years after first oil, the parties are still fumbling with “paperwork,” it means either the Agreement has not been executed as written or it has been executed but hidden. Either way, it is a national embarrassment.

Accounting credit

While Routledge performs confusion in public, the financial statements of ExxonMobil Guyana Ltd., Hess Guyana Exploration Ltd., and CNOOC Petroleum Guyana Ltd. tell a different story – they are all taking the credit.

ExxonMobil Guyana Ltd. (2024) reports: “Revenue includes non-customer revenue of G$260,155.7 million … relating to Article 15.4 of the Petroleum Agreement,” and recognises a matching income-tax expense. That is the classic gross-up accounting technique: record fake revenue and fake tax so the books look balanced.

As for Hess Guyana Exploration Ltd. (2024), its financial statements disclose that “A portion of gross production … is used to satisfy the branch’s income-tax liability and is recognised as sales revenue.” The Government’s oil becomes the company’s “revenue” and its “tax.”

As for the junior, non-American Chinese partner, CNOOC Petroleum Guyana Ltd.’s financial statements go even further, stating that “The Minister accepts the appropriate portion of the Government’s share of profit oil as payment in full of the Contractor’s income-tax liability.” That language does not reflect Article 15, which requires the Minister to pay the tax to the Commissioner-General of the GRA – not merely to “accept” oil.

Amazingly, in a matter as important as this, none of the companies thought it useful, let alone necessary, to disclose this little inconvenient fact.

The black hole

In all three cases the same pattern appears: the companies book the tax as paid, recognise it as revenue, and enjoy the credit. What happens thereafter is the black hole where Mr. Routledge wants to take us, despite the clear language of Article 15 of the Agreement: The Minister must pay to the GRA the tax charge of the oil companies out of Guyana’s share of oil, is said to pay, the GRA is to issue receipts and deliver “proper tax certificates in the Contractor’s name”.

Article 15 states that the tax must be paid from the Government’s share of oil revenue. Where, then, is the evidence of that payment? The Natural Resource Fund shows no deduction, no debit, no outflow. But no one – including the NRF investment committee and the auditors – seem to care a hoot.

In effect, the tax exists only in the companies’ ledgers — not in Guyana’s public accounts. A phantom transaction generates a real benefit to the contractors, while the Government works on a certificate for a payment it never made.

Confusion

This confusion is not accidental. The Government’s failure to manage the Agreement – or even to understand its workings – has produced a system in which no audit has been completed, no receipts have been verified, and no public officer can explain the basic arithmetic of the contract.

The Commissioner of Information, who falls under the Office of the President, has ignored lawful requests for disclosure. The Minister of Natural Resources has neither published the tax receipts nor accounted for the debits from the Government’s share of profit oil. And nothing coming out from the Guyana Revenue Authority, to suggest that it has received the taxes “paid on behalf of the contractor”. This is the contract that is so sacred that it even trumps the country’s sovereignty, public officials’ integrity and most of all, the President’s thundering commitment to review and renegotiate”.

Even a cake shop, run on a basic exercise book and a lead pencil, would manage its accounts with more care than this trillion-dollar industry. The result is a charade: a government pretending to pay, companies pretending to be taxed, and auditors pretending not to notice.

Next week we will leave Georgetown for Houston, Texas and New York, where the parent companies of Hess and Exxon grapple with the accounting equivalent of the three-card trick outside of Demico House.

Posted on

EU observers report offers no endorsement of credibility, let alone free and fair

Dear Editor,

In a response to comments made by the Canadian High Commissioner on the final report of the European Union Election Observation Mission, President Irfaan Ali described the September 1st elections as “free and fair, beyond a shadow of doubt,” and that they were conducted “efficiently and reliably.” While the President is entitled to his view, he must appreciate that elections do not become credible merely because a participant proclaims them so.

Notably, the EU carefully avoided using the term “free and fair”, a descriptor which has been replaced by “credible”, when an Elections Observer Mission considers that an election meets basic democratic thresholds. Its report was professionally prepared, evidence based, each finding was supported by tables, graphs and charts based on thorough and objective observations and facts. By contrast, the President offered none. Ali’s own abuse of his office in the pre-election period was egregious and well documented. His party’s misuse of the State media, its apparatus and resources meticulously documented in the EU’s report, was evident to all.  

President Ali had no reservations when the EU Mission issued almost identical recommendations in 2020 – very, very few of which have been implemented. It is worth noting too, that despite being a constitutional body, GECOM is not subject to a dedicated financial or performance audit. This is an extraordinary omission for an institution that now absorbs billions annually and is dormant for the greatest part of five years.

It is equally difficult to reconcile claims of “efficiency” with an electoral system that is, by every measurable standard, the most expensive per voter in the world. Guyana continues to spend unprecedented sums to maintain an oversized electoral machinery, yet many of the structural weaknesses identified by both international and domestic observers after each elections remain uncorrected.

GECOM has unilaterally concluded that statutory provisions on election-expense reporting have “fallen into disuse.” In other words, GECOM, which should carry out the law, casually ignores and disregards it.

The voters’ list remains inflated by the names of persons long deceased, even as the law provides for continuous cleansing. The constitutional and statutory requirements regarding Commonwealth citizens have, by GECOM’s own admission, been wrongly applied, with the result that ineligible persons voted in the elections.

The WIN party, which had previously donated tens of millions of dollars to Ali’s PPP/C, encountered hindrances to their participation in the 2025 elections, once it became clear that it posed the greatest threat to the PPP/C.   

These are not markers of efficiency or credibility. They mark institutional drift, weak compliance with the law, and a tolerance for practices that heighten cost and undermine democracy. Public confidence is earned not through political declarations but through transparency, accountability, and the consistent application of the law.

The EU Mission’s report offers no endorsement of credibility, let alone free and fair. Its silence speaks louder than any political rhetoric or reassurance.

Yours faithfully,

Christopher Ram

Posted on

Routledge deserves to go!

Every Man, Woman and Child in Guyana Must Become Oil-Minded – Column 172

Introduction

Last week’s column described a statement made by Alistair Routledge, President of Exxon’s local subsidiary, as “blatantly misleading.” As I begin today’s column, let me quote another statement he made at the same press conference: “…you will recall that, prior to 2023, we were not making profits here in Guyana.”

It genuinely pains me to demonstrate – by the company’s own audited figures – how inaccurate that “factual” statement is. In truth, Exxon recorded profits of G$132 billion (2021) and G$637 billion (2022). See below the cropped screenshot of the Income page issued by the company’s local statutory auditors.

It is the same income statement which directs readers to a note about the provision in the Agreement regarding the inclusion of the tax charge in revenue and a below the line equivalent deduction made purely to balance the books and to conceal the true nature of the fictitious transaction.

My anguish at the sell-out of Guyana’s patrimony under the 2016 Petroleum Agree-ment – worsened by the secretive Bridging Deed that extended Exxon’s rights without parliamentary scrutiny and by the padding of over US$92 million in pre-contract costs – explains my low opinion of Exxon as a corporate citizen. After the repeated distortions and evasions of its Vice-President for Finance, Mr. John Colling, and now Mr. Routledge, I can only conclude that Exxon’s corporate culture has been corroded.

For his serial misrepresentations to the Fourth Estate, Mr. Routledge has lost the confidence and respect of his hosts. Under his watch, ExxonMobil Guyana has resisted transparency, delayed relinquishment, and overseen the improper reduction of US$211 million in disallowed audit costs. In the United States, an executive facing such mistrust would have been summoned before Congress or shown the door. In Guyana, he remains a guest of honour.

Both American contractors in the Stabroek Block claim income-tax deductions while grossing up revenue to balance their accounts – a fact clear from their own financial statements. Yet Mr. Routledge insists, “We haven’t applied any tax credits. We are working with the GRA on paperwork on taxes.” What does that even mean? And is it true? Are these not the same statements used in Exxon’s consolidated accounts? 

From Guyana to the USA – via Europe 

In Column 171, we promised to trace those tax certificates to Houston and New York, where Exxon and Hess file their stock exchange reports. Like Banks DIH’s payments to Europe routed through Miami, tax considerations make Exxon’s journey far longer than necessary. Let us now begin with the understanding of a process which starts with the preparation of the oil company’s tax return, followed by the issue of a receipt and a proper certificate in the name of that company. These two contractual requirements are designed to enable Exxon and Hess to claim tax credits in their home country.  

Our next stop is The Bahamas, where Exxon keeps the Caribbean parent of its Guyana operations. The Bahamas, a tax haven with strict financial secrecy, serves as a safe harbour between Georgetown and Europe. From there, the paperwork crosses the Atlantic to Breda, in the Netherlands, home of ExxonMobil’s European headquarters. And that is when the journey gets choppy. 

According to independent investigative reporting, Exxon’s international tax structure is a master class in concealment. Profits from Guyana are booked through intermediate entities in The Bahamas, the Netherlands, and Luxembourg before reaching Texas. Each jurisdiction shields a layer of income, ensuring that neither Guyana nor the United States ever sees the full picture.

The voyage then continues to Luxem-bourg for further fiscal engineering via specialised vehicles. Through this narrow vein, the oil’s monetary value is metabolised until its tax content all but vanishes before crossing the pond westward to Irving, Texas, where ExxonMobil’s headquarters consolidate the accounts of hundreds of foreign affiliates.

This web of subsidiaries and partnerships is designed for one purpose: to feed Exxon’s insatiable appetite to get the last drop of blood – post profits – from what a former Chevron finance director and now a Columbia University lecturer, described as “the most favorable contract I’ve ever seen”. The fiscal transfusion that begins with an unsubstantiated GRA tax certificate ends with an IRS tax credit, reducing Exxon’s U.S. tax bill at Guyana’s expense.

Making rings around the fenceless Guyana

The supreme irony is that while Guyana refuses to require ringfencing of exploration from production activities – the most basic practice in the oil and gas industry and a staple in accounting – ExxonMobil engages in tax ringfencing in an elaborate lattice of subsidiaries across continents to protect the profits they extract from Guyana 24/7/365.

The tragedy for Guyana is that the talent pool controlling the oil sector refuses to learn, hiding behind the absurd claim that only elected officials can be trusted to manage it. This is the same Government that once promised an independent Petroleum Commission – another broken pledge. After five years, not one audit has been completed and relinquishment took a year to enforce, though both are clear obligations under the Agreement. In Parliament they even argued that a professional Commis-sion would cause duplication and delay – proof enough that these ‘elected members’ would be challenged to run a cake shop.

Their contempt for professional oversight shows in the farce of the ministerial audits, where handpicked auditors are valued more for loyalty than competence. That is not all. As one Minister told the National Assembly, “We decided at this point in time not to give this power to non-elected people in a commission… non-elected people are in a commission because you cannot hold them answerable.” The irony is lost on them: Guyana is in this unholy mess precisely because of elected members.

Exxon applies tax ring-fencing with surgical precision, while at home our officials reject operational ring-fencing altogether, allowing costs from one field to be charged to another and deferring higher profit oil for Guyana – even as rising output is offset by falling prices.

Conclusion

For all of Routledge’s verbal meanderings and misrepresentations, the resolution of the tax certificate mystery will harm and embarrass Guyana more than it does Exxon: properly applied, those certificates will drain the Natural Resource Fund, our inter-generation sovereign wealth fund.  

What appears to be a technical or accounting puzzle is, in fact, the product of misguided/non-existent policies, fragile institutions and misplaced loyalties. The asymmetry between the sharks of Exxon and the sardines of the PPP/C government – an analogy with which the ideologues are all too familiar – is profoundly striking.

Until Guyana recognises that sovereignty is the essence of nationhood, that professionals are bound to codes, standards and values, that competence will always trump loyalty and that politicians and elected officials are of no higher quality morally and intellectually than trained professionals, Exxon and their experts will continue to treat our leaders as no more than functionaries in a distant oil colony.