It is doubtful the law allows govt to pay oil...

extends to the Capital Gains Tax Act as well. In violation of section 10 of the PEPA which permits agreements not inconsistent with the Act, the minister went beyond his powers to extend concessions to persons who do not hold such licences, including persons not resident in or carrying on any operation or business in Guyana.

The Granger Administration which signed the 2016 Agreement, and the PPP/C Administrations before and after it, will have an enormous task of justifying whether and how a modification or inapplicability of a tax law can amount to a reversal of a statutory obligation whereby a tax liability payable to the State ends up with the Government paying that tax. The FAA in particular appears to raise an insurmountable hurdle. It requires any remission, concession or waiver to be expressly provided for in a tax Act or subsidiary legislation. Seems that the oil companies might have thought that the vaguely worded Order No. 10 of 2016 to give effect to the Petroleum Agreement would allow the pay-on-behalf-of trick. But the FAA deals with that as well. It provides that no Order (or other subsidiary legislation) will be valid unless the Act under which the subsidiary legislation is made expressly permits the remission, concession or waiver. The Order is made under the PEPA which does not, even by implication, let alone expressly, permit the POB formula.

Conclusion

It seems clear that the taxation Article of the Agreement contains several provisions which do not meet the test of “not inconsistent” with the Act. The Government must surely be aware of this. In the final analysis, it has to decide whether it stands on the side of the law or with Esso and its partners. The choice should be an easy one. But logic and the law never apply to politics in this country, even when it involves substantial revenues to the State.