Guyana’s regulator has dismissed a proposal from Guyana Telephone and Telegraph Company (GTT) to settle a long-running tax dispute.
Following an audit of the operator’s tax assessments dating back to 1991, the Guyana Revenue Authority (GRA) claims that GTT has an outstanding tax bill of US$44.1 million. GTT has queried the amount and the two parties are negotiating the matter.
GRA Commissioner General Godfrey Statia noted that GTT’s offer to pay a reduced sum was rejected as it would have set a precedent for other taxpayers, saying: “You are looking at consistent treatment of all taxpayers and if you negotiate with one you have to do it with all.”
GTT’s parent firm Atlantic Tele-Networks (ATN) is hoping to settle the bill with just US$5 million, arguing that the remainder would be accounted for due to a controversial contractual obligation dating back to ATN’s acquisition of an 80% stake in GTT in 1991. Under the terms of the deal, GTT is legally entitled to receive an annual return on investment of no less than 15%.
In connection to the ongoing dispute, Guyana’s High Court has ordered US$3.2 million to be seized from GTT in connection to the government’s 2012 sale of its 20% holding in GTT to China’s Datang Telecom. The Chinese firm made an initial payment of US$25 million for the stake with a further US$5 million due within two years, but it failed to make the follow-up payment.
The legal back-and-forth over the missing $5 million has seen investigations claim that the amount had been paid without disclosing “to who, how, where and when”, while another proposed that Datang had deliberately withheld the amount in a bid to gain more seats on GTT’s board of directors.
The National Industrial and Commercial Investment Limited (NICIL) determined the amount to be outstanding in 2017 and stated that it would ensure payment was received, with the latest High Court decision supporting this.
The $3.2 million figure accounts for GTT’s dividends for the year ending 31st December 2019, owed to Datang subsidiary Hong Kong Golden Telecom (HKGT), which holds the shares in GTT. The court has ordered GTT to pay a further US$1.8 million in prospective dividends to NICIL instead of its holding firm.
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Publish date : 2020-02-06 03:00:00
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