Ghanaian Government Asked To Tighten Up On Transfer Pricing
August, 22nd 2014
Enhancing tax incentives and training of the Ghana Revenue Authority (GRA) are key to the prevention tax evasion and abuse of transfer pricing law, Omane-Antwi, Professor at Ghanaian Pentecost University, told a seminar in Accra last week.
Addressing the seminar on mid-year review of the 2014 budget statement, Omane-Antwi said that there is scope to increase tax revenues and curb tax evasion by ensuring voluntary tax compliance through enhanced tax incentives and reduction in tax rates. Omane-Antwi called on the government to expend its supplementary budget on specific projects that will boost economic growth, and urged the government to prioritize its budget proposals if they were to be accomplished within the budget cycle.
With support from the Organization for Economic Cooperation and Development (OECD), Ghana formulated a transfer pricing policy in 2012 to follow international best practice in assessing the tax and examining the records of domestic entities that operate in conjunction with other domestic and foreign affiliates.
In April 2014, the Government of Ghana presented its economic and financial policies for the medium term, stating that: "Ultimately, by promoting effective auditing in 2014, the process will reduce the abuses and under-declaration of profits and, thereby, resulting in higher revenues from the tax regime. From 2014, GRA will train more staff in the new transfer pricing regime and extend its application to strategic and expanding sectors of the economy."
It was said that: "Current tax policy initiatives emphasize on improving revenue mobilization through tax effectiveness and efficiency. To that effect, the GRA is continuing its tax modernization program to support the establishment of a Tax Policy Unit in the Ministry of Finance. The policy measures being formulated include rationalizing the tax regime, minimizing abuses in the tax exemption regime, and analyzing the impact of the specific tax regimes in sectors such as petroleum and mining."