The Ghana Revenue Authority (GRA) is investigating a number of multinational companies in the country suspected of massive evasion of tax through profit shifting.
[contextly_sidebar id=”hKnnB20Gymk9Sa7nHXyYyXopyPo5GQEe”]Citi Business News has learnt the investigations can take close to two years to be completed.
In an exclusive interview with Citi Business News, a tax policy advisor at the Ministry of Finance, Dr. Edward Larbi Siaw confirmed the investigations and said,” in Ghana the multi-national put it as tax planning but if you plan your tax payment in that way, now the whole world is saying it is unacceptable, pay taxes where your big production is taking place… But there are indications that some multi-national firms are shifting their profits away from Ghana. “.
Base Erosion and Profit Shifting involves the use of tax reducing financial strategies like transfer pricing by some multi-nationals who within the current rules allocate taxable profits to locations different from those where the valuable business activity takes place, thereby shifting profits across borders to take advantage of favorable tax rates.
A new department has been created at the GRA to conduct the investigations and they have been trained by the Organization for Economic Co-operation and Development (OECD) and other organizations within the World Bank.
“I can assure you we have set up a department in the GRA where they are looking at this trend”, Dr. Siaw added.
He said it was now not appropriate to disclose the names of the companies involved.
“If you over value your imports that is something that is 1 million you make it 2 million, you are reducing the tax. I don’t want to for good judgment or diplomacy I don’t want to mention names”, Dr. Larbi Siaw stated.
He spoke to Citi Business News after the opening ceremony of the 5th annual international tax conference by the Chartered Institute of Taxation and WTS Ghana.
The conference was on the theme, “the rights and obligation of taxpayers in the wake of amendments to tax legislation”.
By: Rabiu Alhassan/citifmonline.com/Ghana