Ghana is considering promulgating laws to criminalize the abuse of transfer pricing in its petroleum sector, the Acting Chief Executive Officer of the Petroleum Commission, Mr. Egbert Faible, has disclosed.
According to Mr. Faible, the abuse of transfer pricing in the country’s budding petroleum sector was worrying and there was the need to stem the trend without any delay.
He warned companies engaged in such abuse to stop since the country’s petroleum regulatory body – the Petroleum Commission, would be swift in taking the necessary sanctions against them.
Mr. Faible made these pronouncements at the 2017 Local Content Conference and Exhibition held in Takoradi Wednesday November 8, 2017.
The two-day event is being held under the theme “Developing Competitive Local Service Providers and Personnel in Ghana’s Upstream Petroleum Industry”
“The era of transfer pricing abuse must end”, he said, maintaining that the Commission would not hesitate to deal with companies found culpable.
Abusive transfer pricing is when a company transacts business with a related party at a price which is in variance with the internationally-accepted market price in order to push profits offshore and reduce its tax bill locally.
Ghana is reported to be losing $36 million every year to transfer pricing. There is currently an ongoing court case between Vodafone Ghana and the Ghana Revenue Authority over transfer pricing issues.
Currently, Ghana has a Transfer Pricing Unit under the Ghana Revenue Authority (GRA) which detects and sanctions companies found in transfer mispricing.
The sanctions usually take the form of fines in addition to the retrieval of money deemed excess in the transfer pricing transaction. The act is not a crime in Ghana.
But, Mr. Faible says there is the need for a more punitive measure to serve as a deterrent, hence, the move to criminalize the act.
He however conceded that it was a difficult step to take but said the commission would engage all stakeholders involved to make it a reality.
“The commission will make recommendations to parliament and the sector minister on this matter and we will see how it goes”, he said.
By: Marlvin-James Dadzie