Dear Editor,
Guyana is no longer the poor, resource-constrained country it was before 2018. Oil has transformed the national balance sheet; production continues to rise; and billions of US dollars in petroleum revenues are flowing into the NRF and the national budget. There is no shortage of money for government projects even when hundreds of billions are siphoned off from state projects by government officials through various mechanisms.
Yet for the ordinary Guyanese worker and for businesses, the relationship between the country’s newfound wealth and tax burden remains deeply troubling. They are excessively high for workers and for businesses. And VAT is already burdensomely high. Several countries don’t have income taxes. Oil rich countries have low corporate tax.
The government deserves credit for increasing the income-tax threshold in 2026. The income-tax structure was also revised in 2025, including reductions in the personal tax rates from 28 percent to 25 percent. But taxes on businesses remain very high at 40%. The question Guyanese taxpayers should be asking is whether these measures are sufficiently ambitious for a country whose oil revenues are increasing at extraordinary speed. The answer, frankly, is no.
Government’s 2026 Budget projected approximately US$2.4 billion in profit oil and US$375.3 million in royalties. It also projected that approximately US$2.374 billion could be withdrawn from the Natural Resource Fund during 2026 to support national development. The Natural Resource Fund ended April 2026 with a balance of approximately US$4.1 billion, according to gov’t. Because oil prices went up by some 20%, the preceding numbers would increase significantly.
The numbers should force a fundamental reconsideration of how much the government needs to collect from workers and businesses through taxation. The fiscal philosophy of a pre-oil Guyana cannot simply be carried forward into an oil-rich nation. A modern country requires a tax system that workers and businesses pay a fair share. Tax compliance is a civic responsibility, and those who deliberately evade taxes should not be allowed to escape their obligations. But there is a difference between tax compliance and excessive taxation. When government revenues are being supplemented by billions of dollars in oil income, there should be a meaningful reduction in taxes.
Government is taking in huge oil receipts while behaving like economic conditions have remained unchanged. Oil revenues should not only transform taxation but also on GRA functioning. GRA has an important role to play, collecting legitimate taxes and ensuring businesses and individuals comply with the law. But GRA Compliance Should not become a tool of intimidation especially to bid for state contracts. Reduce or eliminate taxes so more businesses can qualify and bid for contracts.
A wealthy oil-producing nation should not be relying excessively on taxing the incomes of workers and businesses. Reduce taxes to attract more investment, build a diversified economy, strengthen human capital, and create long-term financial security. Reducing taxes will not lead to reduction in income. It will lead to more revenues. There will be more investors and investment creating jobs, resulting in more national income. Government can strengthen laws to compel foreign companies to train and employ Guyanese and to maintain a certain amount of revenues in country. Trained workers will have higher salaries, benefiting the coffers.
Instead of taxing companies, government should modernise GRA compliance and also reduce unnecessary bureaucracy that will generate additional revenues. Also, if government cracks down on corruption instead of having GRA intimidate businesses, huge amounts of revenues can be collected. A third of the 2026 budget of $1.3 Trillion is siphoned off through corruption. That more than $400 billion will compensate for loss of revenues from reduced taxes. Let the many billionaire gov’t officials explain how they earned their billions – whether by selling chocolates or other sources, and if they can’t satisfactorily, their assets should be confiscated.
The country should have a tax system that does not punish productivity but that encourages investment and job training so that Guyanese can become higher earners. Government should not continue carrying yesterday’s tax burden while enjoying tomorrow’s oil revenues. If oil has changed Guyana’s economic circumstances, then it is time for the tax system to change with them. Implement a policy to make Guyana a magnet for investment not scare away investment through high taxes. And it is time to remove tax compliance for government tendering.
Yours truly,
Faiuze Mohamed
