Business News Thu, 9 Nov 2017

Petroleum Commission to sanction Ghanaians fronting for expats

The Petroleum Commission, Ghana, will soon come out with modalities to sanction Ghanaians fronting for International Oil Companies (OICs) under the guise of joint venture agreement in the oil and gas industry. The Petroleum [Local Content Local Participation] Regulations, 2013 L.I. 2204 prohibits such fronting since OICs use it as a ‘veil’ to evade tax payment.

Th acting Chief Executive Officer of Petroleum Commission, Egbert Faibille in an interview with 3news.com at the third local content conference organized by the Commission in Takoradi on Wednesday said his outfit is aware of these “illegal arrangements”.

The understanding of the commission according to Mr. Faiblle, is that some expatriates seize the opportunity to escape paying tax. Information available to the commission indicates that most Ghanaian companies fold up after the business agreement has been signed leaving the expatriates to operate, he noted. “There are foreigners or expats behind and just give what I will call a pittance to Ghanaians” for the fake joint venture, Egbert Faibille observed.

As a result of this fronting, Mr. Faiblle said, “declaration with respect to income and for that matter payment of tax to VRA and other essentials are not reached”.

In this regard, the Petroleum Commission is considering modalities such as “convergence between the Commission and the registrar of the companies to ensure that we have the bonafides of people who are behind these companies.

“We also intend introducing clauses into upcoming petroleum service contracts …making some of these offences punishable by law maybe jail terms and fines and several other options we are considering”.

Source: 3news.com