Absurd fallacies nothing more than a storm in a teacup

Dear Editor,
On December 29, 2023, chartered accountant, Lalbachan Ram contended that the Natural Resource Fund (NRF) is overstated by some $274.7 billion. Advancing his case, he expressly stated that some “grave error” has been committed on the part of several Government agencies namely, the Office of the President, Ministry of Natural Resources, the Guyana Revenue Authority, the Central Bank, the National Assembly, and the Attorney General’s Chambers.
In order to determine whether there has been any violation or error that Mr Ram is contending, one has to read, understand, and apply Article 15 in its entirety?as opposed to a singularly selected “sub-section” of the referenced Article; within the broader legislative framework.
Towards this end, Article 15.1 of the Petroleum Agreement (2016) states that “…except as otherwise set forth in this Article 15.1, no tax, value added tax, excise tax, duty, fee, charge, or other impost shall be levied at the date hereof or from time to time thereafter on the Contractor or Affiliated Companies in respect of income derived from Petroleum Operations or in respect of any property held, transactions undertaken, or activities performed for any purpose authorised or contemplated…”
Article 15.4 states that the Minister hereby agrees that…” a sum equivalent to the tax assessed pursuant to Article 15.2 and 15.3 will be paid by the Minister to the Commissioner General, Guyana Revenue Authority (GRA) on behalf of the Contractor and that the amount of such sum will be considered income of the Contractor…”.
Although Article 15.4 and 15.5 states that the Contractor and their affiliate companies are subject to the Income Tax Act (Cap 81:01) and the Corporate Tax Act (Cap 81:03) by filing their tax returns, and that the Minister shall do so on the Contractor’s behalf. According to Article 15.1, the Contractor, and their affiliate companies (ie, ExxonMobil Guyana and their Co-venture partners), are effectively exempted from corporate taxes. As such, it is absolutely unnecessary to make any separate payment over to the GRA.
Of note, the purpose of the Minister filing the tax return “with the sum equivalent to the tax assessed…” on the Contractor’s behalf is merely to accommodate ExxonMobil, the Operator, in satisfying their statutory reporting requirements in accordance with the US tax laws. That’s all!
As previously alluded, let’s now examine this matter?that is, Chris Ram’s contention within the broader relevant legislative framework to determine whether any violation or breaches of the laws can be established.
First and foremost, the GRA is governed by the Revenue Authority Act (Cap 79:04). Section 24 of this Act establishes that… “All revenues collected by, or due and payable to, the Authority under this Act shall be paid into the Consolidated Fund”. In so doing, the GRA administers the Income Tax Act (Cap 81:01) and the Corporate Tax Act (Cap 81.03). Moreover, the Income Tax Act and the Corporate Tax Act are applied to individuals and companies respectively.
Secondly, it is of utmost imperativeness that the merits or demerits of Mr Ram’s main argumentation be viewed properly and correctly within the framework of the Fiscal Management and Accountability Act (2003) (FMAA), which he abysmally ignored completely. This Act is the most supreme authority on this matter such that it provides for “the regulation of the preparation and execution of the annual budget; the receipt, control, and disbursement of public moneys; and such other matters connected with or incidental to the transparent and efficient management of the finances of Guyana” (cited from Part 1 (1) of the Act).
Part IV of the FMAA Act Section 37 establishes the definition for the classification of public moneys. Accordingly, Section 37 (1) states that: “All public moneys shall be classified as either”-
a) Received moneys;
b) Moneys in the Consolidated Fund, including any moneys in the Contingencies Fund;
c) Moneys in an Extra-budgetary Fund;
d) Drawn moneys; or
e) Moneys in a Deposit Fund.

Section 37 (2) establishes that…” All public moneys shall be deemed to be received moneys from the time they become public moneys until the time that they are credited to the Consolidated Fund, an Extra Budgetary Fund, or a Deposit Fund”. Section 39 (1) establishes that “An Extra-Budgetary Fund may be created by an Act, which legislation shall set out –
a) The officials who will undertake the financial management of the Extra Budgetary Fund, including the responsibilities and accountabilities of the officials charged with the managing of the Extra Budgetary Fund;
b) The Banking arrangements that pertain to the Extra Budgetary Fund;
c) The source or sources of public moneys to be credited to the Extra Budgetary Fund;
d) The accounting rules and auditing requirements applicable to the Extra Budgetary Fund; and
e) The financial reporting requirements applicable to the Extra Budgetary Fund, including the reporting of financial performance both during and at the end of each fiscal year.
Section 37 (4) establishes that…” Subject to any other law, resources of an Extra Budgetary Fund may be administered either through its own accounts in selected banks pre-approved by the Minister or through the payment and banking services of the Consolidated Fund but shall be accounted for separate and apart from any other resources.”
The NRF Act (2021) Section 15 (1) establishes that “Petroleum revenues shall be directly paid into a bank account denominated in United States Dollars and held by the Bank as part of the Fund”. Section 15 (2) goes onto define what petroleum revenue shall include, such as from royalties, profit oil, petroleum income tax, additional profits, any signature bonus etc. Then, Sections 16, 17 and 18 pursuant to the NRF Act establish the withdrawal rules of the Fund, whereby its states that all withdrawals from the Fund shall be deposited into the Consolidated Fund (Section 16 (2)).
Noteworthily, through the National Budgets for 2022 and 2023, the sum of approximately $336.5 billion was withdrawn from the NRF?all of which were deposited into the Consolidated Fund in accordance with the NRF Act and the FMAA Act.
Therefore, it is evidently illustrated herein that the Natural Resource Fund, having been established, viz-á-viz, the Natural Resource Fund (NRF) Act (2021), is in fact classified as an Extra Budgetary Fund. Furthermore, the NRF was created legally and authoritatively in accordance with the provisions set forth (specifically Section 39) in the FMAA Act. Consequently, the Fund is by no means overstated and the Fund’s administration therefor is in accordance with the relevant laws.
Against this background, it is quite difficult not to dismiss Mr Ram’s baseless aspersions, once again, as an absurd fallacy, which is nothing more than a “storm in a teacup”. Mr Ram relied selectively and/or incompetently on a single provision pursuant to the Petroleum Agreement (2016) to incorrectly corroborate his argument. This is where he has made a huge blunder, because what is most and ultimately important is not whether there is an alleged “misapplication” of a “singular” provision pursuant to the Petroleum Agreement (2016), but whether a breach of the financial law and any other legislation have been perpetuated, which he has failed to establish. Any corporate law student would know that the “law” always precedes any type of agreement/contract. Hence, it is perplexingly unfathomable to comprehend how a trained attorney like Mr Lalbachan Ram could be so daft.
More so, as a chartered accountant who has been producing budget analysis for the past two decades, he, more than anyone else ought to be familiar with, and the application of several pieces of legislations?as regards the issue he sought to address. These are: chiefly the Fiscal Management and Accountability Act (2003); the Revenue Authority Act (Cap 79:04); the Income Tax Act (Cap 81:01); the Corporation Tax Act (Cap 81:03); and the Natural Resource Fund Act (2021).
Finally, this author would like to urge Mr Ram to refamiliarise himself with all of the relevant legislations on these matters. Specifically, the FMAA Act before making these absurd and outlandish claims in the future, that would jeopardise his professional credibility, when seriously challenged.

Yours respectfully,
Joel Bhagwandin