The ongoing revision of the Local Content Act is expected to conclude soon, with a focus on addressing existing loopholes, according to PPP General Secretary Dr. Bharrat Jagdeo during his weekly press conference.
The Local Content Act, initiated in December 2021, has undergone months of review, and Dr. Jagdeo expressed satisfaction with the economic benefits it has brought to Guyanese citizens.
He highlighted that the act, intended to prioritize local participation in the petroleum sector, has already generated significant economic gains.
Dr. Jagdeo revealed that the estimated impact of the Local Content Act last year amounted to approximately $400 million USD involving around 1500 Guyanese companies.
Looking ahead, he anticipates this figure to potentially rise to $1 billion USD by 2027, given the offshore industry’s expansion.
Despite these positive outcomes, Dr. Jagdeo acknowledged reports of companies exploiting certain provisions of the act.
He cautioned that the government would implement measures to address such cases, especially instances where local companies act as fronts for foreign entities.
Dr. Jagdeo emphasized that the tax system would be a tool to scrutinize and rectify such practices.
The Local Content Act primarily aims to ensure that Guyanese nationals and companies benefit substantially from the growth of the country’s petroleum sector.
It outlines 40 specific services that oil companies must procure from Guyanese entities.
The ongoing revision seeks to expand and strengthen these provisions.
Dr. Jagdeo noted that, in some instances, local suppliers faced challenges in meeting the requirements, leading to exceptions.
However, he emphasized the need to close existing loopholes and prevent abuse of the law.
The imminent completion of the Local Content Act revision signifies the government’s commitment to refining the regulatory framework and ensuring a fair and equitable distribution of benefits within the petroleum sector.
Reported by Josiah Williams for NCN News