Civil Society Organizations (CSOs) have called on the next government of Ghana to institute measures to monitor the spending of the Ghana National Petroleum Corporation (GNPC).
GNPC currently reports to different agencies, but information provided to external oversight actors, including Parliament, tend to be inconsistent, according to the organizations.
The CSOs said GNPC’s reporting practices and associated transparency obligations should also be defined in law.
They also called for an end to presidential selection of the chief executives and board and the politicization of key appointments.
The organizations said Ghana had passed laws to ensure that authorities deal with various forms of tax avoidance.
“The government must now invest in the capacity and coordination of agencies to prevent transfer mispricing in the extractive sector, a major challenge facing many resource-rich developing countries.
“Revenue mobilization is vital for the financing of Ghana’s development solutions. In the extractive sector, significant losses can result from tax avoidance practices, particularly transfer mispricing. This occurs when one company sells a good or service to another related company, because these transactions are internal, they are not subject to ordinary market pricing and can be used to shift profits out of Ghana to low-tax jurisdictions.”
The CSOs stated that despite the passage of transfer pricing regulations in 2012, a lack of agency coordination hindered the effectiveness of tax audits and collection in Ghana, adding that inadequate capacity and the reshuffling of tax audit staff pose a major challenge to the Ghana Revenue Authority (GRA).
“If the next government is to tackle the issue of transfer mispricing, it must invest in capacity of the Ghana Revenue Authority’s Transfer Pricing Unit at the Large Taypayers’ Office, improve cross-agency coordination and focus on staff retention.”
Generating optimal returns
“In order for Ghana to generate optimal returns from its extractive sector agreements, the next government must ensure all processes that lead to the decision to extract, licensing processes are efficient and transparent for both companies and government.”
The organizations said Ghana had made important strides towards a more transparent licensing process by enacting a new petroleum law that introduced competitive bidding in the oil and gas sector.
“However, the mining sector still operates under a first-come-first-serve system which sometimes fails to allocate rights to companies with the necessary technical and financial capabilities.”
By Samuel Boadi