Ghana to reform its corporate tax policy to increase revenue

Ghana plans to review its process for granting corporate tax exemptions to mining and oil companies as part of measures to eliminate fraud and boost revenues, its vice president said on Wednesday.

Mahamudu Bawumia said tax exemptions claimed by some resources companies were not transparent, and in some cases, not backed by records. He did not directly accuse any individual companies of wrongdoing.

“Improper accounting of resources on the part of concessionaires is a major source of revenue loss and it is for this reason that we are reviewing the exemption process,” he told a meeting of donors and Ghana tax and customs agencies in the capital Accra.

Last month the International Monetary Fund called on Ghana – Africa’s second biggest gold producer and a nascent crude exporter – to adopt additional measures to boost revenues.

Official data was not immediately available on the volume of tax exemptions claimed by companies in the resources sector. However, finance Ministry data seen by Reuters showed that Ghana granted a cumulative three billion cedis ($678 mln) in tax exemptions last year.

“Our experience is that these costs that some mining companies actually incur are really a black box. They are not transparent. We don’t really know,” Bawumia said.

Mining companies operating in Ghana include South Africa’s Anglogold Ashanti, Asanko Gold and Newmont Mining while oil production is dominated by London-listed Tullow Oil and Kosmos Energy.

 

 

Source: Reuters

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