The Local Content Secretariat (LCS) will soon be working with the Immigration Unit under the Home Affairs Ministry for a more coordinated approach to the issuance of work permits for the oil and gas sector.
This was revealed by Director of the LCS, Dr Martin Pertab, during an exclusive interview with this publication.
“Since discovering oil in 2015, the industry has grown, and with it, the experience of Guyanese nationals in the sector, specifically for onshore positions. As such, the Secretariat is intent on ensuring that Guyanese nationals having the requisite skills and experience are employed in the sector. Therefore, through the Oil and Gas Immigration Unit, applications for work permits will be intentionally reviewed to ensure that the company applying for the permit has done its due diligence to ensure that Guyanese are unable to fill the role for which the work permit is being requested,” Pertab explained.
He contended that the Secretariat is adamant that capacity exists locally for Guyanese to fill roles in the areas of logistics, accounting, human resources, and health and safety.
Just recently, Vice President Dr Bharrat Jagdeo revealed that the government is moving to clamp down on companies which are rotating foreign workers to avoid remitting taxes to the Guyana Revenue Authority (GRA).
Jagdeo said the LCS has received evidence that a number of large companies supplying the oil and gas industry were culpable of this practice.
The Income Tax Act requires persons to be resident in Guyana for six months in order to be eligible to pay income tax. If persons are rotated out of the country before that six-month period is up, it means no income tax for the State.
“And then sometimes they bring them back the following year or bring new people. So, I spoke with the Commissioner (of GRA). And we’re now drafting legislation that will cover that loophole. Because that used to be in our Income Tax Act. So that’s one. So that people that come to work for the oil and gas sector, they can’t use this creative mechanism of rotating the foreign workers to avoid paying taxes,” Jagdeo warned.
The Local Content Act 2021 is currently being reviewed with the aim of tightening up on various loopholes.
According to Jagdeo, the amendments to the Act are expected to be finalised by next year.
Moreover, in those amendments, the government is looking at proposals that include increasing the percentage of work that companies in oil and gas have to give to locals, as well as the range of sectors.
The Act which outlines 40 different service areas that oil and gas companies and their subcontractors must procure from Guyanese and Guyanese-owned companies.
These include 90 per cent of office space rental and accommodation services; 90 per cent of janitorial services, laundry and catering services; 95 per cent pest control services; 100 per cent local insurance services; 75 per cent local supply of food; and 90 per cent local accounting services.
The Local Content Act mandates penalties such as fines ranging from $5 million to $50 million for oil and gas companies and their sub-contractors who fail to meet the minimum targets of the legislation, as well as those who are in breach of the Act.
According to Pertab, the LCS continues to execute its mandate of developing and maintaining measures for the effective implementation of local content by companies operating within Guyana’s petroleum sector as well as the implementation of strategies that will give preference to, or ensure equal treatment of, Guyanese nationals and Guyanese companies.
