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Expedite action on Beneficial Ownership Register to block tax leakages – Dr. Manteaw

Dr. Steve Manteaw, Chairman Of The Committee Dr. Steve Manteaw, Co-chairman of the Ghana Extractive and Transparency Initiative

Mon, 17 Aug 2020 Source: thebftonline.com

To help plug the loopholes in tax mobilisation, it is important that the Registrar-General’s Department expedite implementation of the Beneficial Ownership Register, Co-chairman of the Ghana Extractive and Transparency Initiative, Dr. Steve Manteaw, has said.

His comments come on the back of delays in implementing the register, which is supposed to keep accounts of politically-exposed persons and others who are owners or beneficiaries of certain companies but keep their identities anonymous when bidding for government contracts – something that can breed corruption.

Speaking at an event organised by the Tax Justice Coalition-Ghana on the theme ‘The Beneficial Ownership and Right to Information Act: What Role and Opportunities are there for Journalists in Curbing Illicit Financial Flows in Ghana?’, Dr. Manteaw narrated a case wherein the country nearly lost GH¢16million in tax to beneficial ownership.

“I had a hint that there were some irregularities around procurements in respect of the Atuabo Gas Processing Plant. So, I raised this concern with the Ghana Revenue Authority (GRA). The basis of my argument was that there was a company registered in Dubai and I discovered that the principal director of that company bore the same name as the general manager of Sinopec Ghana, which means that Sinopec was trading with itself.

“It is not really criminal to trade with your related party, but the rules are that the arm’s-length principle must be observed to ensure the right prices are quoted and are consistent with global prices in respect of similar goods and services. This we couldn’t establish, because the transaction was on the blind side of GRA. Subsequently, when GRA investigated the matter based on my allegations, it was confirmed that there had been some transfer pricing manipulations and prices had to be readjusted to the international levels. And in the process, GH¢16 million was raised in tax payments from the company.

“And so this is how we could have lost GH¢16million if we hadn’t been vigilant in exposing the fact that people behind the company in Dubai were the same people behind it in Ghana. So, beneficial ownership allows you block revenue leakages and also prevent conflict of interest situations, especially in contracts,” he said at the event held in Accra.

The new companies act now requires companies to declare their beneficial owners and send details to the Registrar-General’s Department (RGD) to be compiled in a register that will be made accessible to the public. Companies were given until end of July this year to submit such data to the RGD, which is expected to published them on its website in October.

The country is already reeling under the pressure of revenue shortfalls, hence blocking leakages will be key to government’s tax-generation efforts.

According to Finance Minister Ken Ofori-Atta, provisional fiscal data for first-half of the year show that revenue mobilisation fell short of target by 26 percent – resulting mainly from shortfalls in oil revenue, Customs receipts and non-oil Non-Tax revenues.

Total Revenue and Grants for January to June 2020 amounted to GH¢22 billion, compared with a programmed target of GH¢29.7 billion.

The Africa Progress Panel says about 60 percent of illicit flows in Africa come through commercial transactions. 35 percent of this comes from criminal activity proceeds such as trade in weapons, people and drugs; while 5 percent comes from corruption, bribery and embezzlement of states’ national wealth.

Source: thebftonline.com
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