GEORGETOWN, Guyana, CMC—The Guyana government has warned companies that they will face severe penalties for using loopholes to cheat the Local Content legislation.
“We are serious about this… we are examining how they are doing this, and the information is credible, and we’re going to act on this information soon,” Vice President Bharrat Jagdeo reiterated, having warned of the consequences one week earlier.
Jagdeo told reporters at his weekly news conference that the Irfaan Ali administration aims to vigorously pursue these delinquent companies since the Act was designed to benefit the Guyana population.
He warned that companies engaged in the practice will not only lose their local content certificate but also be fined if they are found to be in breach.
According to the Act, any person knowingly submitting false and misleading information to the Local Content Secretariat will be fined five million dollars (One Guyana dollar = 0.004 cents) for an individual and GUY$10 million for a corporate body.
A Guyanese national or company can face similar fines if it is found to be aiding or abetting anyone to contravene the Act.
The Local Content Act, passed in 2021, prioritizes Guyanese nationals and companies in the procurement of goods and services. It lays out 40 services that oil companies and their subcontractors must procure from Guyanese companies and Guyanese nationals.
Jagdeo said the government will enhance the current Act next year, ensuring all loopholes are regulated effectively. This includes amending the Income Tax Act to thwart oil companies from rotating foreign workers to evade taxes.
Earlier this month, Jagdeo said that he had already spoken with the competent authority, “and we are now drafting legislation that will cover that loophole.”
In addition, the government is reviewing the eligibility percentages for several sectors outlined in the legislation, including rentals requiring 100 percent local procurement.
Jagdeo hinted at adding new sectors to the local content schedule.
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