Calls for the suspension of the implementation of the controversial Agyapa Royalties deal have intensified as the Tax Justice Coalition has described the deal as a wrong precedent.
Though the Finance Ministry seems to have addressed all related issues raised around the deal, civil society groups under the Alliance of CSOs working in Extractive, Anti-Corruption and Good Governance, continue to mount pressure for the suspension of its implementation.
Speaking to Citi Business News at a conference to mark the Global Tax Week Celebration, the Chairman of the Tax Justice Coalition, Vitus Azeem stated that an arrangement such as the Agyapa Royalties deal encourages corporations and entities to look for ways to avoid paying taxes, hence must be discouraged.
“When you go to invest in a tax haven you want to avoid paying tax or at least reduce paying taxes. That is one thing that we are against. We’re encouraging those that can pay to pay taxes for the development of a country or our country. So that’s our first task.”
The second point is that tax havens are not transparent in the way they deal with their customers. The whole system of a tax haven itself is not transparent. But thirdly in our case, this Agyapa Royalties thing, has not been transparent so that’s the third thing that we have against the Agyapa deal” he added.
In reaction to the Ghana Revenue Authority’s optimism about achieving the revised 2020 tax revenue target of GHS 42.7 billion cedis, Vitus Azeem said government was more likely to miss the target.
“Even though we’re hoping that we should get the target I personally don’t think that we can hit the target because normally in the past we have not even been able to meet the target. But this year is an exceptional year with the COVID-19 pandemic. You see the promises, the exemptions that are given to various corporations not to pay tax, so we’re really reducing our potential or tax potential. So I don’t think that we’re going to meet the target.”
The Tax Justice Coalition in its address to journalists dubbed “Towards Tax Justice in a Post-Pandemic World: A struggle against the Neoliberal Agenda”, outlined a number of demands it wants government to carry out, including but not limited to the scrapping of wasteful tax incentives benefiting wealthy elites and corporations, embarking on progressive reforms that tax large incomes, assets and wealth as well as a repeal of regressive consumption taxes that increase the burden on the poor and marginalized.
Parliament to furnish Special Prosecutor with documents on Agyapa deal today
Parliament is expected to later today, Monday, September 14, 2020, dispatch all documentation regarding the Agyapa Royalties deal to the Office of the Special Prosecutor.
The Special Prosecutor wrote to Parliament last week to demand information and related documents for the transaction agreements.
The request is in line with the mandate of the office to exercise the functions and powers of prevention of corrupt activities.
When furnished with the information, the Special Prosecutor’s Office will seek to ascertain whether the controversial transaction could potentially promote corruption.
The Special Prosecutor made a request to the House.
The request, made by the Special Prosecutor, Martin Amidu was pursuant to Sections 2(1) (c), 29 and 73 of the Office of the Special Prosecutor Act, 2017 (Act 959) and Regulation 31 (1) and (2) of the Office of the Special Prosecutor (Operations) Regulations, 2018 (L.I. 2374) which mandates the office to exercise the functions and powers of prevention of corrupt activities.
“This office will be concentrating on any potential of the said transaction(s) to promote and facilitate the suspected commission of corruption and corruption-related offences and advise the government accordingly,” portions of the letter sighted by citinewsroom.com noted.
About the deal
In 2018, Parliament passed the Minerals Income Investment Fund Act 2018 which establishes the Fund to manage the equity interests of Ghana in mining companies and receive royalties on behalf of the government.
The purpose of the fund is to manage and invest these royalties and revenue from equities for higher returns for the benefit of the country.
The government then, through the Minerals Income Investment Fund (MIIF), set up Agyapa Royalties Limited to monetize Ghana’s gold royalties.
This was after Parliament on August 14, approved the Agyapa Mineral Royalty Limited agreement with the government of Ghana despite the walkout by the Minority.
In exchange, the company plans to raise between $500 million and $750 million for the government on the Ghana and London Stock exchanges to invest in developmental projects.
The deal, however, has become a topical issue following concerns from members of the opposition.
Civil Society groups in Mines and Energy have also described the Special Purpose Vehicle as one which is not transparent and must be suspended.
But the government insists the deal is in the best interest of the country.