By Judith Ugwumadu | 06 March 2013
Ghana needs to tighten up its tax-collection regime as it is losing around $45m in revenue from the extractive industry each year, an African forum has heard today.
The ActionAid-led forum called for a review of Ghana’s investment policies and the co-ordination of the country’s investment laws in order to check the massive loss of revenues from the extractive industries through corruption, tax evasion and other illicit financial flows.
The forum, held in the Ghanaian capital Accra, considered tax justice issues with policymakers and civil society organisations.
Bernard Anaba, a policy analyst at Ghana’s Integrated Social Development Centre, said: ‘Ghana might be losing about $45m annually since 2011 due to the inability of government to apply the new fiscal rates because of stability agreements.’
Stability agreements usually froze tax laws of the host country to the companies concerned for periods between 10 and 15 years, Anaba explained as he presented findings from his organisation’s research on tax incentives.
As such, over the past two years, Ghana had lost about $70m in revenue from its oil and gas sector. He said this because of the failure to levy capital gains tax on two major oil deals – the sale of EO Group’s 3.5% stake in Kosmos Energy to Tullow Oil and Sabre Oil’s sale of a 4% share in Tullow Oil to South Africa’s national company PetroSA.
Anaba said the findings also revealed that Ghana had lost about $1.2bn a year as a result of trade tariff rationalisation.
Emmanuel Budu-Addo, ActionAid-Ghana’s head of finance, called on commercial and multi-national enterprises to pay the levies due. He said they should ‘pay at rates in reasonable proportions to the profit they made in places in which they transacted business, extracted resources and made profits.’
