Wednesday, June 01, 2011

Ghana government called on to review petroleum and mining contracts

Civil society in Ghana, led by Tax Justice Network Ghana and partner organisation ISODEC (Integrated Social Development Centre), has called on the Ghanaian government to review existing mining and petroleum contracts even when these contracts include so-called 'stability' clauses designed to prevent future governments from changing terms and conditions relating to taxes, royalty payments and suchlike.

TJN Ghana has also suggested that the government should strengthen the capacity of the Ghana Revenue Authority (GRA) to monitor and collect mining and petroleum revenues. This follows recent revelations that revenues from oil production might have been lost as a result of poorly functioning meters fitted to the storage and off-loading platform at the Jubilee Fields, which entered production in Autumn 2010.

Following a strategic planning session last week in Kumasi, TJN Ghana, has issued a communiqué applauding the government's recent efforts to reform the tax system and rationalise the revenue agencies, but also calling for a review of unnecessary tax exemptions and a crackdown on tax dodging: "punitive actions for tax malfeasance should be made deterrent enough to reduce the incidence of tax evasion," adding that the government should: "make a concerted effort to educate the general Ghanaian populace on their tax obligations linked to the right to essential services financed by tax revenue."

Other recommendations stemming from the Kumasi session include a progressive increase in Ghana's tax to GDP ratio to allow for increased investment in education, health and physical infrastructure; government support for an international standard on country-by-country reporting by multinational companies; greater cooperation between the revenue agencies and the Bank of Ghana to strengthen anti-evasion and avoidance efforts; and greater transparency of contracts and tax concessions given to investors.

The text of the communiqué can be downloaded here.


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