Govt to clamp down on companies rotating foreign workers to avoid taxes

The Government is beginning to clamp down on companies which are rotating foreign workers to avoid remitting taxes to the Guyana Revenue Authority (GRA).

Vice President Dr Bharrat Jagdeo on Thursday noted that the Local Content Secretariat has received evidence of many large companies supplying the oil and gas industry being culpable of this practice.

“I have seen evidence that is available to the Local Content Secretariat where they have a long list of workers, who are rotating workers and a lot of them are in management,” he told media operatives at his weekly press conference.

Under the country’s Local Content Act, larger companies from specific sub-sectors are required to have at least 75% local managers.

Further, individuals in Guyana for over six months have to pay income tax to the GRA. In their bid to continue their operations with foreign managers, the Vice President said some companies are implementing a system whereby they rotate workers every six months; some of these workers return after six months in their home country while some do not.

To tackle this dishonest practice, he said legislation is being drafted. “We’re now drafting legislation that will cover that loophole because that used to be in our income tax act in the past,” he highlighted.

“There are some companies that may be looking at this today and they may have a lot to worry about,” Jagdeo added.

He said talks have also commenced with the Commissioner General of GRA on the matter.

The Vice President said a second practice involves having Guyanese companies with a local content certificate placing foreigners into their management structure regardless of if they are required to be there.

He said while the Government is looking to close loopholes where people are subverting the act, they will be written shortly to ensure greater compliance.

“Our ultimate aim is to get our people not just as workers in these places but as managers too, so they have to train and improve skills” he stated.

Also to be addressed is the payment of local workers less than foreigners for comparable skills.