No Special Tax Pass for America

592 GUARDIAN♦ACCOUNTABILITY♦INTEGRITY IN JOURNALISM♦GUYANA

No Special Tax Pass for America

OPINION BY: Hem Kumar October 2026

The United States should not be permitted to demand from Guyana the very concessions that its own corporate, environmental and labor systems would not casually grant at home. If American companies want access to Guyana’s oil wealth, infrastructure pipeline and emerging markets, they should compete fairly—not seek a taxpayer-funded advantage over Guyanese businesses.

The United States has a 21 percent federal corporate income-tax rate, while most states also impose corporate-income taxes; 44 states levy one, with an average top rate of about 6.57 percent among those states. Guyana’s general corporate-tax system is already substantial on paper: commercial companies generally face 40 percent tax on chargeable profits or a 2 percent minimum-corporation tax on turnover, while other non-commercial companies generally face a 25 percent rate.

But headline tax rates alone do not tell the real story. In the United States, a foreign or domestic investor operates within a far denser enforcement environment: federal and state taxation, regulatory agencies, workplace rules, litigation exposure, environmental permitting, disclosure obligations, organized labor in some sectors, and far higher wage expectations.

In Guyana, by contrast, the state is still building the institutional machinery needed to regulate a rapidly expanding petroleum economy and major infrastructure buildout. That makes tax holidays and bespoke concessions especially dangerous: they can strip away one of the few clear, measurable ways through which the Guyanese public captures value from foreign investment.

The Uneven Bargain

Issue	United States	Guyana	Special US concession
Corporate tax	21% federal, state 1-10%	40% -commercial 25%- other companies	A tax holiday can reduce or eliminate the public return even where Guyana loses.
Consumption tax	Sales and City taxes	VAT 14%- zero rated and exempt	Foreign firms should not receive bespoke relief
Payroll Dues	Federal payroll-tax, State unemployment contributions	NIS 8.4%- Employer 5.6% -Employee	Guyana should not subsidize foreign labor costs while local workers and firms carry ordinary statutory burdens
Labor rules	Federal requirements, anti-discrimination rules , workplace-safety obligations, States setting higher protections. The Equal Pay Act	Worker protections exist, enforcement capacity, wage levels , bargaining power are weaker .	US firms should not exploit Guyana’s weaker bargaining environment while simultaneously demanding public subsidies.
Environmental compliance	Extensive federal, state and local permitting, monitoring, enforcement and liability exposure	Regulatory systems are developing	Lower regulatory cost in Guyana tax breaks would compound it

The point is not that Guyana should copy the United States line by line. The point is simpler: American corporations already know how to operate under stringent regulation, pay layered taxes and meet higher labor costs at home. They should not arrive in Guyana demanding a softer tax regime, reduced obligations and privileged access while presenting themselves as engines of development.

The Tax Holiday Trap

A tax holiday is often marketed as an investment incentive. In reality, it can become a transfer of public wealth from citizens to investors.

Every dollar Guyana gives away through an unnecessary exemption is a dollar not available for flood control, health care, roads, schools, electricity, policing, climate resilience, public housing, technical education or capital for Guyanese entrepreneurs. This is particularly serious in a country whose oil revenues are finite, whose developmental needs are immense, and whose people have waited generations for meaningful economic transformation.

A government should therefore ask a hard question before granting any special fiscal concession: would the company invest anyway?

If the answer is yes—as it may be for firms pursuing Guyana’s energy sector, public infrastructure contracts, strategic geography, regional market access or oil-funded consumer demand—then the concession is not an incentive. It is a giveaway

Guyana’s existing tax structure also shows why the debate must be grounded in facts, not slogans. The country already applies exemptions and zero-rated treatment in certain categories, while VAT is generally charged at 14 percent on taxable supplies. The appropriate issue is not whether incentives can ever be used; it is whether each one is transparent, time-limited, legally authorized, publicly justified and demonstrably better for Guyana than collecting the ordinary tax.

Ambassadorial Lobbying and Sovereignty

When a foreign ambassador lobbies aggressively for tax holidays, special concessions or preferred treatment for companies from his or her country, that is not a neutral act of diplomacy. It is commercial advocacy on behalf of external corporate interests

.Guyana must decide whether its tax policy will be made in the public interest or shaped through diplomatic pressure. The American ambassador may properly promote US investment. But Guyana’s government has an equal—indeed superior—duty to protect revenue, preserve competitive neutrality and ensure that Guyanese businesses are not relegated to the margins of their own economy.

The danger is not simply lost tax revenue. It is the construction of a two-tier economy:

♦ Foreign firms receive fiscal relief, expedited approvals, diplomatic backing and access to lucrative projects.

♦ Guyanese firms face bank-interest costs, limited capital, cumbersome procedures, scarce procurement opportunities and the full weight of tax compliance.

♦ Guyanese workers remain trapped in lower-paying or insecure work while high-value contracts, profits and decision-making flow abroad.

♦ The state becomes increasingly dependent on foreign companies for sectors it should be deliberately helping local enterprises enter.

That is how a country with immense natural wealth remains economically dependent.

Killing the Golden Goose

Guyana is the golden goose—not for foreign governments, not for multinational corporations, and not for politically connected intermediaries, but for present and future generations of Guyanese.

The petroleum sector, public infrastructure program, strategic location and rapidly expanding domestic economy create exceptional bargaining power. The tragedy would be for Guyana to surrender that leverage precisely when it should be using it to secure better terms: taxes, local ownership, jobs, technology transfer, skills development, environmental bonds, transparent procurement and reinvestment in communities.

A foreign company that wants a tax concession should have to prove, publicly and independently, that it will deliver more to Guyana than Guyana would receive under the ordinary law. That proof should include binding commitments on employment, Guyanese procurement, training, profit retention, local equity participation, environmental responsibility and the repayment of incentives if promises are broken.

A Guyanese Standard

Guyana should adopt a simple national rule: no special deal for a foreign company unless the Guyanese public can see the full price, the full benefit and the enforceable obligations.

That means:

♦ Publish every tax holiday, waiver, concession and investment agreement.

♦ Require a public fiscal-impact assessment before approval.

♦ Set firm expiry dates and prohibit automatic renewals.

♦ Attach measurable local-content and workforce targets to every incentive.

♦ Require claw back provisions where companies fail to meet employment, investment or procurement promises.

♦ Bar discretionary concessions that give foreign firms an advantage over qualified Guyanese businesses.

♦ Subject major concessions and Exim Bank-linked arrangements to parliamentary scrutiny.

♦ Protect Guyana’s freedom to trade and invest with all partners, including the United States and China, according to Guyana’s national interest—not Washington’s geopolitical preferences.

Guyana should welcome American investment, as it should welcome investment from every credible partner. But investment is not benevolence, and diplomacy is not a license to raid the future.

A country that gives away its taxes, contracts, strategic assets and policy space in exchange for promises of investment may discover too late that it has not attracted development—it has subsidized its own economic subordination.