Ghana’s financial secrecy moderately high – Tax Justice Network
The Tax Justice Network, an organisation concerned with tax havens and tax evasion, says Ghana’s financial secrecy is moderately high and the country needs to improve, especially in the transparency of beneficial owners of companies, their financial accounts and country by country financial reports.
In its recently released 2015 Financial Secrecy Index which ranks jurisdictions according to their financial secrecy and the scale of their offshore financial activities, Ghana has a financial secrecy score of 67 per cent, and a rank of 48 out of 92 territories.
The Network assesses financial secrecy by combining the global weighting of offshore financial territories, with a qualitative rating of 15 secrecy indicators that include banking secrecy, existence and availability of registers for trusts and foundations, companies, their beneficial owners, accounts and financial reports; efficiency of tax administration, anti-tax evasion and anti-money laundering structures; automatic information exchange; bilateral treaties and international commitments; and international judicial cooperation.
Ghana’s performance among the 15 indicators was highest in bilateral and international commitments to anti-secrecy.
Additionally, Ghana has ratified the five most relevant international treaties relating to financial transparency.
Ghana’s poorest performance among the indicators are largely in transparency: the existence of company ownership information, accounts and financial reports, and accessibility and affordability to the public (Tax Justice Network considers a fee of less than $10 or £10).
High weakness was also found in the efficiency of tax and financial regulations as Ghana does not require domestic tax payers to disclose to local tax administration authorities, payments to non-residents.
The 2015 financial secrecy ranking is led by Switzerland with a financial secrecy rating of 73 per cent.
It is followed by Hong Kong, the USA, Singapore, Cayman Islands, Luxembourg in 6th place, Lebanon, Germany, Bahrain and the United Arab Emirates in tenth position.
An estimated $21 to $32 trillion of private financial wealth is located, untaxed or lightly taxed, in tax havens around the world that use secrecy to attract illicit financial flows.
The Tax Justice Network says illicit cross-border financial flows are estimated at a minimum of $1 trillion per year, far outweighing the estimated $135 billion in global foreign aid, and African economies alone have lost over $1 trillion in capital flight since the 1970s, while their combined external debts is less than $200 billion.
“So Africa is a major net creditor to the world – but its assets are in the hands of a wealthy élite, protected by offshore secrecy; while the debts are shouldered by broad African populations,” the Network said.
The Network believes that the index and identification of tax havens, are the first steps in and fighting illicit flows.
It adds that world leaders are establishing measures to tackle the flows and a global automatic information exchange system to help countries find out about the cross-border holdings of their taxpayers, is expected to be deployed in 2017.
By Emmanuel Odonkor