The Guyana government has reiterated a warning to companies using loopholes to cheat the Local Content legislation that they will face severe penalties.
“We are serious about this… we are examining the ways in which 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 go after 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 will also be slapped with fines if they are found to be in breach.
According to the Act, any person who knowingly submits false and misleading information to the Local Content Secretariat, will be fined five million dollars in the case of an individual and GUY$10 million, in the case of a body corporate.
A Guyanese national or company can face similar fines, if they are found to be abetting anyone to contravene the act.
The Local Content Act passed in 2021, prioritises Guyanese nationals and Guyanese companies in the procurement of goods and services. It lays out 40 services that oil companies and their sub-contractors 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 include amending the Income Tax Act to thwart oil companies from rotating foreign workers to evade taxes.
Earlier this month, Jagdeo said that he has 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 a number of sectors outlined in the legislation, including rentals requiring 100 per cent local procurement.
Jagdeo hinted at the possibility of adding new sectors to the local content schedule.
