Illicit Financial Flows: Ghana losing more than $1 billion annually – Tax expert

Ghana is losing more than a billion dollars illicitly through transfer pricing, undervaluing of imports and overvaluing of exports, among others, and the merger of the various revenue agencies, Private legal practitioner, and tax expert Abdallah Ali-Nakyea has revealed.

According to Mr. Ali Nakyea, the inability of revenue collection agencies to judiciously mobilize funds has resulted in both local and foreign companies evading taxes.

Illicit financial flows according to Global Financial Integrity refer to money that is ‘illegally earned, transferred, or utilized. If it breaks laws in its origin, movement or uses it merits the label’.

Mr. Ali Nakyea who was speaking at the 2017 World Public Service Day organized by the Ghana Integrity Initiative in Accra says Ghana is among 6 other countries that lacked the trade, tax and deals data to curb the illicit flows.

‘Over- and under-invoicing in the five countries facilitated the illegal inflows or outflows of more than $60 billion during the 10 year period. Ghana had more than $14 billion in mis-stated invoices over the entire 10-year period, equivalent to 6.6 percent of its gross domestic product.’ Mr. Nakyea stated.

The resulting effect of this huge monies illegally transferred out of the economy has led the fiscal constraints that hampered Ghana from meeting the millennium development goals.

Mr. Nakyea also revealed that commercial activities constituent between 60% to 65% of illicit financial flows while criminal activities and corruption constituent about 35% and 3% respectively.