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GRA refuses GTT tax offer; court orders seizure of Datang’s GTT dividends

6 Feb 2020

The head of the Guyana Revenue Authority (GRA) has refused an offer from Guyana Telephone and Telegraph Company (GTT) that would see the telco pay a reduced sum to resolve a dispute over tax dues dating back to 1991, Kaieteur News writes. The GRA claims it is due around USD44.1 million from GTT relating to tax assessments dating back to 1991 but GTT has challenged the figure. The two sides are currently in talks to resolve the issue. According to GRA Commissioner General Godfrey Statia GTT had offered to pay a reduced sum, but the proposal was rejected on the grounds that such settlements would then need to be offered to other tax payers. The official was quoted as saying of the talks: ‘You are looking at consistent treatment of all taxpayers and if you negotiate with one you have to do it with all.’ Mr Statia went on to say that as a consequence of the offer’s rejection, negotiations have become ‘stuck’.

As noted by TeleGeography’s GlobalComms Database, GTT’s parent company Atlantic Tele-Networks (ATN) has set aside just USD5 million for the matter. The group claims that the dues would be offset by an amount to ensure that GTT’s return on investment was no less than the 15% per year it is contractually entitled to under the terms of the controversial 1991 contract under which ATN acquired its 80% stake in GTT.

In a related development, meanwhile, the Guyanese High Court has ordered the seizure of USD3.2 million from GTT. The amount is part of an outstanding USD5 million due to the Guyanese government from the sale of its remaining 20% stake in GTT to Chinese firm Datang Telecom Technology and Industry Group in 2012. The buyer paid just USD25 million upfront and was due to pay a further USD5 million over the course of the following two years but failed to do so. Conflicting accounts over the subsequent years had muddied the waters, with one investigation claiming that the sum had been paid but it could not determine ‘to who, how, where and when’ whilst a later report claimed Datang was withholding the amount for more seats on GTT’s board of directors. In mid-2017 the National Industrial and Commercial Investment Limited (NICIL) finally confirmed that the amount was outstanding and that it would pursue the payment – resulting in the recent High Court ruling.

According to Kaieteur News the USD3.2 million figure represents the payment of all dividends due and owing to Datang’s subsidiary Hong Kong Golden Telecom (HKGT) – through which it holds its shares in GTT – for the year to 31 December 2019. In addition, the remaining USD1.8 million would be recovered at a future date, as the court also ordered that future dividends to be paid by GTT to HKGT would go instead to the NICIL.

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