The revenues that Trinidad and Tobago collects from energy taxes could be significantly higher than what it is currently but companies under-report revenue and sometimes, government doesn’t even collect the taxes, local energy consultant Anthony Paul claimed yesterday.
“We are not managing our resources. For starts, we are not giving contracts well. We are not setting the right tax rate. We aren’t even collecting the taxes. And now we aren’t even spending the money we collect well,” he told reporters at a media conference hosted by the Trinidad and Tobago Local Content Chamber and the Joint Consultative Council (JCC) at the boardroom of the Trinidad and Tobago Group of Professionals Centre Building, Fitzblackman Drive, Woodbrook.
Or if they are collecting, they are collecting those taxes late, like when Prime Minister Kamla Persad-Bissessar received a US$159 million cheque from BP in 2011 for outstanding payments from 2001 to 2006, he said.
“When BP paid those back taxes, those were taxes from six years ago, just as the (seven-year statute of limitations) was about to expire. So not only are we collecting taxes, we are collecting it late so the time value of the money has depreciated and the companies are happy,” he said.
He also admonished that, despite the argument from energy companies that Trinidad and Tobago’s energy tax regime is restrictive and one of the highest in the world, these companies want to avoid paying taxes and are attempting to take advantage of the government to change policy in their favour.
Paul, who used to be a senior civil servant in the Ministry of Energy, said while he was at the ministry, when companies made that same argument, the ministry allowed them to bid on the level of taxation that should be applied for based different levels of production and commodity prices.
“Not one came in lower than the current tax rate. But if we are dotish enough to take it on they will take advantage of us and we have been behaving like bobolees. We forget we know this industry. We have been in this business for 100 years. We understood (our value) and we are regressing. Why? Because the companies are telling us (we are uncompetitive) and we are not doing our own work,” he said.
“(These major energy companies) know that the government of Trinidad and Tobago does not have the self confidence to stand up to them and argue what they think is right. ...
“The reality is oil and gas taxation has many factors and growing planes and the level you set is based on the ability of investors to make money off it. The first consideration is the geology. You don’t see them pulling out of Venezuela or Nigeria. It’s not just the tax rate; it’s how much oil you have and how cheaply you can get it out. If I can hide my taxes, and I know the government isn’t really collecting taxes, do you think I care what the tax rate is?” he asked.