The government is to commission an audit of local and multinational companies operating in key sectors of the economy as part of measures to check tax evasion and transfer mispricing.
The move had become necessary following the continued loss of revenue by the state as a result of the failure of some companies to properly honour their tax obligations.
Although no timeline was given, the Minister of Finance, Mr Ken Ofori Atta, said all companies found to be involved in any illegalities would be penalised and made to pay all the outstanding taxes.
“The government will commission audits of local and multinational enterprises in mining, oil and gas, telecommunications services, transfer pricing and high net worth Individuals to address transfer mispricing and other forms of tax evasion,” he said while presenting the mid-year fiscal policy review of the 2018 budget statement.
On downstream petroleum monitoring, he said recent audits by the Ghana Revenue Authority (GRA) had established that some Oil Marketing Companies (OMCs) had been under-declaring liftings.
“The GRA in collaboration with the National Petroleum Authority (NPA) have developed the use of a common platform to report on oil lifting. With this development, it will be possible to detect if the OMCs understate their oil lifting from the depots and tanks. Severe action including imposition of penalties and prosecutions will be initiated to collect all outstanding taxes,” he said.
The GRA, he said, had enhanced its capacity on prosecutions and investigations and will work with relevant state institutions to intensify its investigations and prosecution on non-tax compliant persons.
Mr Ofori Atta said total petroleum receipts, which covered proceeds from liftings and other sources of petroleum revenue from January-May 2018, was US$372.30 million.
In terms of liftings, US$313.34 million was accrued from the 4.96 million barrels of crude oil that was lifted from the various oil producing fields – Jubilee, Tweneboa Enyera Ntomme (TEN) and Sankofa between January and May 2018.
With respect to gas production, 8,881.38 million metric standard cubic feet (MMScf) of gas was delivered to the Ghana National Gas Company (GNGC) in the first five months of 2018.
He, however, indicated that there were no gas receipts in the referenced period due to the Volta River Authority’s non-payment for gas supplied it by the GNGC. The state ,however, received US$57.96 million in Corporate Income Taxes from the partners.
According to the mid-year budget, a total of US$160.48 million was transferred into the Ghana Petroleum Funds (GPFs) in January-May 2018, compared with US$102.16 million in 2017. Out of the amount transferred in the period, the Ghana Heritage Fund (GHF) received US$48.15 million, compared with US$30.65 million in the same period in 2017, while the Ghana Stabilisation Fund (GSF) received US$112.34 million, compared with US$71.51 million in the same period in 2017.
The total amount transferred in the first half of 2018 from petroleum liftings and related proceeds to the Annual Budget Funding Amount (ABFA) was US$117.55 million, compared with US$84.73 million in the same period in 2017.
The Finance Minister also added that it was important for businesses to live up to their tax obligations as most institutions were found culpable when it came to meeting their obligations.
He also explained that the revenue authority must show greater discipline about the granting of exemptions and the plugging of the loopholes that plague the system.
“The Akufo-Addo government will continue to intensify its efforts to stem the corruption that bleeds the country of its hard-won revenues. In that same vein, the government is making a social compact with Ghanaians that every single Ghana Cedi, every single Ghana Pesewa that it takes in will be spent with only one objective in mind ‘ the advancement of Ghana’s great future,” he said. — GB