Category: News

 

Adnan Adams Mohammed

In bid to increase oil production from Ghana’s first oilfield, Jubilee field, Tullow Oil PLC has begun a multi-year, multi-well drilling campaign offshore Ghana.

Maersk Venturer is the contractor engaged to drill four wells in 2021; two Jubilee production wells, one Jubilee water injector well, and one TEN field gas injector well.

In a press statement released issued last week and signed by Tullow Chief Executive Officer indicated that, as previously announced, the Maersk Venturer is expected to drill four wells in total in 2021, consisting of two Jubilee production wells, one Jubilee water injector well and one TEN gas injector well. It assured that, Tullow will work closely with the government and its other partners to unlock the full potential of the Jubilee and TEN fields.

“Today is an important milestone in the implementation of our long-term Business Plan. Working closely with the Government of Ghana and our joint venture partners in Ghana, I am confident that we will unlock the full potential from the Jubilee and TEN fields through this multi-year, multi-well drilling programme,” Rahul Dhir said.

The company launched a 10-year business plan at its capital markets day, in November 2020. Ghana is at the heart of this plan.

Through a rigorous focus on costs and capital discipline, Tullow believes that these assets have the potential to generate material cash flow over the next decade and deliver significant value for Ghana and investors.

The release added that throughout the campaign, “Tullow will continue to implement its Shared Prosperity strategy through a strong local content programme with suppliers in Ghana, the professional and technical development of Ghanaian nationals and continued investment in STEM education, enterprise development and shared infrastructure”.

The Ghana portfolio has a large resource base with extensive infrastructure already in place.

 

 

 

Adnan Adams Mohammed

 

A recent study has shown that Ghana raked in additional mineral revenues of GH₵ 2.1 billion (US$713.9 million) from royalties and taxes between a period of 15 year.

 

Improvement in mineral royalty, as a result of adjustment in the royalty charges from 3 to 5 percent, contributed a total of GH₵1.25 billion (US$417.1 million), translating into 57.8% of the total addition and improvement in corporate tax, also as a result of adjustment in the rate from 25 to 35, contributed GH₵ 913.5 million (US$295.8 million), translating into 42.2% of the total addition. Also, other revenues contributed a total of GH₵1.6 million (US$1.5million).

 

This brings the additional total direct contributions of GH₵ 2.16 billion (US$713.9) to government revenue from the mining sector. The study conducted by Ghana’s Extractive Industries Transparency Initiative (GEITI) with technical and financial support from GIZ and executed by Scanteam from 2004 and 2018 indicates that, significant portion of this amount came from the reviewed royalty and corporate taxes resulting from the changes in these fiscal rates between 2010 and 2018 in line with GHEITI’s policy recommendations.

 

“The GHEITI reconciled mineral revenue growth as a percentage of total Government domestic revenues, increased from a mere two percent (2%) in the base year period of 2004/2005 to a stabilised rate of four percent (4%) during the period (2010-2018)”, the report said; “A Study On The Revenue Impact Of GHEITI-inspired Fiscal Reforms In Ghana’s Mining Sector” which was launched fortnight ago captured. “This was also the period when the majority of GHEITI-recommended policies were implemented.”

 

However, the total cumulative ‘government take’ mineral revenue of GH₵ 10.6 billion (US$4.2 billion) was realised between 2004 and 2018. This amounts to an average of GH₵ 706.6 million ($280 million) realised between 2004-2018, compared to the baseline revenue average of GH₵ 46.3 million (US$51.4million) in 2004/2005. In nominal terms, this is about 15 times more in 2018 than was in 2004/2005.

 

According to the report, fiscal rate appreciation from 3% to 5% for royalties and 25% to 35% for corporate taxes were the major policy impact in terms of additional revenues to government, compared to other measures.

 

The estimation took cognisance of the stability agreement between the Gov
ernment of Ghana and Newmont mining company on one hand and AngloGold Ashanti on the other hand as well as the renegotiated fiscal rate of AngloGold Ashanti and Gold Fields mining companies between 2017 and 2018. But the impact of the AngloGold Ashanti and Gold Fields fiscal rate changes in 2017 & 2018 were largely muted because they both still paid royalty at 3% due to the applicable market price/oz of gold within the period.

 

Other mineral revenue additions which came as a result of GHEITI’s advocacy also accrued to institutions other than central government.

 

These include mineral ground rent and license/ environmental permit fees. These additions were estimated at GH₵65,028,490 million. A total of GH₵32.4 million ground rent accrued to landowners while GH₵33.4 million accrued to state institutions such as the Minerals Commission and Environmental Protection Agency (EPA) as licenses/environmental permit fees.

 

Recent investments in the mining sector have also been remarkable. Yearly investment in the mining sector have increased significantly over the years from a low of $231.78 million in 2000, peaking at $1.4 billion in 2012 before declining slightly to 953.17 in 2018^[1]. This growth has stayed relatively stable over the period.

 

The report relied on the evidences of documented GHEITI policy recommendations, their specificity, timing and engagements as well as key informants’ confirmations of these policy impacts. Almost all the key informants agreed to the policy impact of GHEITI in the mining sector. This and other views were important in arriving at the conclusions of this report.

 

GHEITI’s work has also regularly featured in the national economic policy and budget statements. Other reports featuring the involvement of other Government Ministers/officials in GHEITI’s work attest to the familiarity of GHEITI’s policy recommendations to the Government. These and many other involvements of Government in GHEITI’s work may have played a significant role and are testaments to the policy successes.

 

The impact of GHEITI-inspired policies was noted to have a two-dimensional effect, first, the indirect impacts and second, the direct fiscal impact of the policy recommendations on government revenues. 

 

Indirect impacts are impacts which could not be readily quantified in monetary/fiscal terms but have contributed qualitatively in enhancing mineral revenue performance. They include such issues as enhanced tax compliance, mineral purity, pricing, and revenue assurance, some of which led to the adoption of best practice approaches by sector institutions such as the GRA to improve on mineral revenue transparency. For example, for revenue assurance, a total of Ghc 700.6 million (absolute figure) being discrepancies between companies’ payments and Government’s receipts were reconciled. While Ghc 630.4 were resolved with available documentations, a net stream of unresolved discrepancies booked in the GHEITI reports (2004-2018) was GH₵ -17,739,348. The reconciliation therefore ensured a regular flow of revenue streams to government and can be viewed rather qualitatively in its absolute terms.

 

Since its inception in 2003, GHEITI has generated many reports and data for public engagements. About 15 mineral revenue reconciled reports, annual activity reports and several newsletters have been published.

 

GHEITI provides a useful platform for policy engagement. The collaboration among corporations, CSOs and government in promoting transparency and accountability in the mining sector has so far been commendable. It has seemingly reduced the mistrust, which previously characterised the relationship among these key stakeholders, and has helped to procure the social license for a thriving mining industry in Ghana.

 

In the decade 2000- 2010, the industry saw relative stability in Ghana. And after several years of delay (2004-2010) in implementing GHIETI recommendations for the review of fiscal provisions of the sector, the Government instituted some reforms in 2010 which, saw the royalty rate change from the sliding scale of three to six percent (3-6%) to a flat rate of five percent (5%), and in 2012 the review of corporate tax from 25 percent to 35 percent. Still in 2012, the Government reviewed the capital allowance from the first-year allowance of 80 percent and the subsequent years at 50% on the reducing balance to 20 percent on straight-line basis over five (5) years.

 

The study estimated the revenue baseline from 2004 and 2005 being the preceding base years marking the start of the EITI implementation in Ghana. Also, the report established the additional/ decline in revenue accruing from the fiscal policy reforms inspired by GHEITI.

 

Six (6) revenue streams that constituted ‘government take’ within the scope of the study with respect to the GHEITI reconciliation reports (2004-2018) and other miscellaneous additions were considered in this study. These revenue streams include: corporate tax, mineral royalty, property tax, ground rent, license fees, dividends and other miscellaneous additions resulting from GHEITI’s recommendations. The study therefore established some additional revenue, accrued from the fiscal policy reforms inspired by GHEITI.

 

 

By Elorm Desewu

The private sector credit growth slowed in the first two months of the year due to constrained demand for credit. The annual nominal growth in private sector credit slowed to 7.4 percent in February 2021 compared with 21.8 percent, in the corresponding period of 2020.

Similarly, real private sector credit contracted by 2.7 percent compared to a growth of 12.9 percent over the same comparative period.

The performance of the banking sector remained strong through end-February 2021, with robust growth in total assets, deposits and investments. Total assets increased by 18.5 percent on a year-on-year basis to GH¢152.0 billion, reflecting strong growth in investments in government securities by 45.9 percent to GH¢67.9 billion.

Total deposits recorded a year-on-year growth of 25.1 percent to GH¢104.0 billion reflecting strong liquidity flows emanating from the COVID-19 fiscal stimulus, payments to contractors, SDI depositors, and clients of SEC-licensed fund managers.

Financial soundness indicators remained positive underpinned by robust solvency, liquidity, and profitability indicators. The industry’s Capital Adequacy Ratio was 20.2 percent at end-February 2021, well above the regulatory minimum threshold.

Core liquid assets to short-term liabilities was 26.5 percent in February 2021 compared with 31.3 percent a year ago. Net interest income for the first two months grew by 10.9 percent to GH¢2.0 billion compared to 25.9 percent a year ago.

Net fees and commissions grew by 13.7 percent to GH¢435.4 million, compared with 18.4 percent growth recorded during same period last year, reflecting the observed dip in growth in loans and trade finance-related businesses. Operating income rose by 8.7 percent, lower than the corresponding growth of 23.6 percent, but was supported by cost control measures which resulted in operating expenses declining by 0.3 percent, in contrast to the 18.6 percent increase for same period in 2020. Loan loss provisions, however, grew sharply by 62.2 percent, significantly higher than the 6.5 percent a year ago, reflecting continued elevated credit risks.

Profit before tax, increased to GH¢1.1 billion over the first two months of 2021 compared to GH¢1.0 billion the same period last year.

Notwithstanding the sluggish credit demand and supply conditions due to the pandemic, the COVID-related regulatory reliefs and policy measures continue to support lending activities, with new advances for the first two months in 2021 totalling GH¢4.7 billion. In the latest Credit Conditions Survey, banks expect an increase in demand for credit and are signalling an ease in credit stance over the next two months.

Non-Performing Loans (NPL) ratio increased from 13.8 percent in February 2020 to 15.3 percent in February 2021 arising partly from the general pandemic-induced repayment challenges as well as some bank-specific loan recovery challenges.

Interest rates on the money market broadly showed downward trends for shortdated instruments and mixed trends for medium to long-dated instruments. The 91-day and 182-day Treasury bill rates declined to 13.6 percent and 14.0 percent respectively in February 2021, from 14.7 percent and 15.2 percent respectively, in February 2020. Similarly, the rate on the 364-day instrument decreased to 16.9 percent from 17.8 percent over the same comparative period. Rates on the secondary bond market have also generally declined, except for rates on the 5- year bond which increased by 35 bps to 19.9 percent. Yields on 2-year, 3-year, 6- year and 7-year bonds declined, while rates on the 10-year, 15-year and 20-year bonds remained unchanged.

The weighted average interbank rate declined to 13.6 percent from 15.9 percent, in line with the cut in the monetary policy rate in March 2020, and improved liquidity conditions due to the COVID regulatory relief measures. Consequently, average lending rates of banks declined to 21.0 percent in February 2021 from 23.4 percent in the same period of 2020, consistent with developments i
n the interbank market.

 

 

 

 

Adnan Adams Mohammed

 

The management of the state transmitter of electricity, Ghana Grid Company Limited (GRIDCo) is cited for not collecting from 10 of its customers a sum of over GH¢234 million which has been outstanding for more than twelve (12) months as of 31 December 2017.

 

This is contrary to Section 91(1) of the new Public Financial Management Act (PFMA) 2016, and Clause 16.1 of the Ghana Grid Company Limited (GRIDCo) transmission agreement with customers, according to the Auditor-General’s 2019 report.

 

“We recommended to the management to assess the recoverability of these balances”, the report proposed, adding: “In addition, clauses in the respective transmission agreement including clause 16.2 (reduce capacity for no-payment within 10 working days), 16.3 (termination of service) and 16.1 (application of bank guarantees) aimed at recoverability of transmission fees should be enforced”.

 

The report noted that based on trade receivable confirmation responses received, “four customers disputed amounts totalling GH¢183,765,553” charged by GRIDCo “as regulatory levies, ancillary charges and power infrastructure levies”.

 

“We recommended that the management should engage the Public Utilities and Regulatory Commission (PURC) and the respective customers to resolve this dispute”, the report said.

 

 

Read below, excerpts of what the A-G’s report said about GRIDCo:

 

GHANA GRID COMPANY LIMITED

 

42. Contrary to Section 3(3) of the National Pensions Act 2008, (Act 766) Management did not remit to the custodian, Ecobank Ghana Limited, monthly third-tier pension contributions totalling GH¢21,986,104 as of the year-end 31 December.

 

This amount is made up of the principal contributions due of GH¢2,616,586 and accrued interes
t of GH¢19,369,518, which has accrued since August 2013.

 

 

We recommended to Management to ensure that, contributions are remitted to the appropriate custodians within the required period as set out in Section 3(3) of Act 766 to avoid payment of penalties.

 

43. Ghana Grid Company acquired VAT agency status in June 2017, however it did not charge output VAT per a directive from the Ministry of Finance. There was however no formal documentation or correspondence for this directive. The approval from the Ghana Revenue Authority has also not been obtained in respect of this directive. In order to avoid penalties from GRA, we recommended that Management should obtain approval from the Ministry of Finance and the Ghana Revenue Authority in respect of VAT not charged on transmission services provided.

 

44. The Company did not have a signed transmission service agreement (TSA) with 8 customers and power generators, although its accounting and finance manual requires a contract to be in place for transmission services rendered. Also, TSA’s for 7 customers had expired and have not been renewed. We recommended to Management to sign and renew all expired TSA agreements with all its customers.

 

45. Contrary to Section 91(1) of the PFMA 2016, and Clause 16.1 of the GRIDCo transmission agreement with customers, the management did not collect from 10 customers a total of GH¢234,338,331, which has been outstanding for more than twelve (12) months as of 31 December 2017. We recommended to the management to assess the recoverability of these balances. In addition, clauses in the respective transmission agreement including clause 16.2 (reduce capacity for no-payment within 10 working days), 16.3 (termination of service) and 16.1 (application of bank guarantees) aimed at recoverability of transmission fees should be enforced.

 

 

46. Based on trade receivable confirmation responses received, 4 customers disputed amounts totalling GH¢183,765,553 charged by the Company as regulatory levies, ancillary charges and power infrastructure levies. We recommended that the management should engage the Public Utilities and Regulatory Commission (PURC) and the respective customers to resolve this dispute.

 

47. There was no on-lending agreement between VRA and GRIDCo in respect of facilities VRA borrowed funds to construct and transferred to GRIDCO. The asset was recognised as long-term liabilities in GRIDCo’s accounts. We advised Management to engage VRA and the Ministry of Finance to conclude on an on-lending agreement stating the terms of the facility.

 

48. Bui Power Authority responded to our trade receivable confirmation that GRIDCo owed them GH¢28.96 million. This has, however, not been recorded in the books of GRIDCo. Discussion with Management disclosed that these amounts have not been agreed upon. We recommended to Management that they should reconcile these amounts with Bui Power Authority (BPA) and once an agreement is reached, Management should recognise these transactions.

 

49. Contrary to Regulation 39(2c) of FAR 2004, an amount of GH¢22,381,028 recognised as compensation payments were not supported with independent valuer’s report. We recommended to Management to ensure that all compensation payments are recognised and adequately supported. In addition, Management should make such documents available to the audit team.

 

 

50. VRA in response to our trade payables confirmation disputed the balance due from GRIDCo as of 31 December 2017. There was difference of GH¢53,752,944 in favour of VRA. The variance is as a result of different rates used in the computation of the transmission losses. We recommended to Management to engage the Public Utilities and Regulatory Commission (PURC) and VRA to resolve the dispute. In addition, Management should recognise the amounts in the general ledger once resolved.

 

51. GRIDCo as of 31 December 2017 breached the loan covenants ratios with 4 of its lenders. This could trigger early repayment, non-approval of subsequent disbursement or penalties. We advised Management to monitor loan covenants to ensure compliance, as non-compliance may restrict access to funds.

 

52. In contravention of Section 91(1) of PFMA 2016, Act 921, GH¢112,074 advanced to thirteen (13) institutions has either not been retired or the services for which the payments were made have not been rendered for over six months to six years. We recommended to Management to put in place measures to recover these amounts, if the purpose or services for which the amounts were paid are no longer needed. We recommended to Management to investigate the alleged stolen items and put in place controls to prevent this from recurring.

 

By Elorm Desewu

The impact of the scary COVID 19 pandemic on the banking industry’s performance seems moderate as banks remained liquid, profitable and well-capitalized.

The banking sector has remained strong through end-February 2021, with robust growth in total assets, deposits and investments, according to the Bank of Ghana, (BoG).

Total assets increased by 18.5 percent on a year-on-year basis to GH¢152.0 billion, reflecting strong growth in investments in government securities by 45.9 percent to GH¢67.9 billion.

Total deposits recorded a year-on-year growth of 25.1 percent to GH¢104.0 billion reflecting strong liquidity flows emanating from the COVID-19 fiscal stimulus, payments to contractors, SDI depositors, and clients of SEC-licensed fund managers.

Financial soundness indicators remained positive underpinned by robust solvency, liquidity, and profitability indicators. The industry’s Capital Adequacy Ratio was 20.2 percent at end-February 2021, well above the regulatory minimum threshold.

Core liquid assets to short-term liabilities was 26.5 percent in February 2021 compared with 31.3 percent a year ago. Net interest income for the first two months grew by 10.9 percent to GH¢2.0 billion compared to 25.9 percent a year ago.

Net fees and commissions grew by 13.7 percent to GH¢435.4 million, compared with 18.4 percent growth recorded during same period last year, reflecting the observed dip in growth in loans and trade finance-related businesses.

Operating income rose by 8.7 percent, lower than the corresponding growth of 23.6 percent, but was supported by cost control measures which resulted in operating expenses declining by 0.3 percent, in contrast to the 18.6 percent increase for same period in 2020. Loan loss provisions, however, grew sharply by 62.2 percent, significantly higher than the 6.5 percent a year ago, reflecting continued elevated credit risks.

Profit before tax, increased to GH¢1.1 billion over the first two months of 2021 compared to GH¢1.0 billion the same period last year.

Notwithstanding the sluggish credit demand and supply conditions due to the pandemic, the COVID-related regulatory reliefs and policy measures continue to support lending activities, with New Advances for the first two months in 2021 totalling GH¢4.7 billion.

The latest Credit Conditions Survey shows that banks expect an increase in demand for credit and are signalling an ease in credit stance over the next two months. Non-Performing Loans (NPL) ratio increased from 13.8 percent in February 2020 to 15.3 percent in February 2021 arising partly from the general pandemic-induced repayment challenges as well as some bank-specific loan recovery challenges.

 

 

 

Adnan Adams Mohammed

 

A member of parliament and energy communication consultant has disputed the Akufo Addo government’s long standing claims that, the previous government’s signed Power Purchase Agreement under ‘Take-or-Pay’ conditions have been changed to ‘Take-and-Pay’.

 

The former consultant at the Energy Ministry noted that, both the Energy Ministry and the Electricity Company of Ghana are unable to come clear on which take-or-pay PPA with the Independent Power Producers (IPPs) have been renegotiated as Take-and-Pay or cancelled.

 

“We asked the Ministry of Energy that: ‘If you say you have renegotiated the PPAs, how many of them have you signed off?”, Edward Bawa, a member of the Mines and Energy Committee of Parliament  in an interview last week.

 

He said, the minister failed to provide clarity on that matter during a recent debate on the floor of Parliament regarding the budgetary allocation to the Energy Ministry, because there is nothing like that.

 

“They couldn’t give us an answer.”

 

Secondly, he added, “we asked them: how many PPAs have been cancelled? They couldn’t give us an answer”.

 

“So, we have told them that we are going to organise a session for them to come and tell us how many PPAs you cancelled and how many of them you renegotiated from take-or-pay to take-and-pay”’, he said on the show.

 

According to him, the Electricity Company of Ghana itself, “which is supposed to be the offtaker, did a presentation to us in 2019 and never indicated that any PPA has been cancelled”.

 

The Bongo lawmaker pointed out that “the one that they delayed and they made an attempt to cancel was what generated the $134 million judgment debt – GCGP”.

 

 

He further asserted that the National Democratic Congress government was the only administration that has ever signed tak
e-or-pay agreements with IPPs in Ghana.

 

“All the IPPs that were signed before the NDC came to power in 2009 were all on take-or-pay basis”, he asserted, indicating: “Asogli, for instance, is a take-or-pay contract”.

 

Some six months ago, the government started directly engaging lenders of independent power producers (IPPs) as part of efforts to renegotiate their power purchase agreements (PPAs). The government also offered to refinance IPPs’ outstanding debts at a discount through a designated energy fund.

 

The PPA renegotiations were being done as part of the Energy Sector Recovery Programme (ESRP), a five-year reform plan aimed at restoring the financial sustainability of Ghana’s energy sector.

 

Since 2019, the government said it has has been holding talks with about 12 IPPs in a bid to convert their PPAs, which are based on take-or-pay arrangements, to more favourable terms.

 

In doing so, the government said it believes the lenders of IPPs had a crucial role to play in alleviating the debilitating financial strains on itself arising from the unbalanced legacy energy sector contracts.

 

“Government urges lenders to take a sensible and pragmatic approach and urgently consider the refinancing proposals in order to conclude negotiations as quickly as possible.

 

“Globally, financial institutions are having to reconsider their positions in light of the impact of the COVID-19 pandemic and its devastating impact on national economies, including triggering defaults and credit downgrades,” a statement from the Finance Ministry said in October 2020.

 

The government has bemoaned the situation where it paid nearly US$1bn for unused power in the last two years due to excess electricity contracted on a take-or-pay basis with the IPPs.

 

Take-or-pay power generation contracts are common in the energy industry and oblige the off-taker (government, in this case) to pay for power supplied by the producer irrespective of available demand.

 

The government has already secured an agreement with two IPPs—CENIT Energy and Cenpower—in the past couple of weeks to adjust their current PPAs in order to realise cost savings.

 

While CENIT Energy agreed to amend its PPA to a tolling structure, Cenpower has agreed to switch to natural gas as primary fuel, a move government says will deliver substantial cost savings, estimated at US$3bn, over the remaining term of the PPA. Finance Minister Ken Ofori-Atta said at the time that the government welc
omed Cenpower’s commitment to Ghana and recognises Cenpower’s conversion to gas as a significant step in helping regenerate the country’s energy sector.

 

“In recent weeks, there has been increased momentum under the ESRP Consultation Process towards resolving some extremely challenging legacy issues inherited from the previous administration. We encourage all other IPPs to engage constructively with the government negotiating team to conclude negotiations as soon as possible. IPPs have a vested interest and a significant role to play in providing a stable energy supply as well as ensuring a fair, balanced and sustainable energy sector for the people of Ghana

 

“As ever, this government is committed to building a competitive and dynamic energy sector, where private investments can thrive and the interests of the Ghanaian people and businesses continue to flourish,” Mr. Ofori-Atta said.

 

 

By Elorm Desewu

Ghana’s economy is on the path of recovery with a sustained momentum in pick-up in economic activity. The Bank of Ghana’s updated Composite Index of Economic Activity (CIEA) recorded an annual growth of 13.9 percent in January 2021, the highest since December 2019, compared to 3.4 percent in the corresponding period of 2020.

The key drivers of economic activity during the period were construction, imports, industrial consumption of electricity, domestic VAT, passenger arrivals at the airport, and port activity.

The Bank’s high frequency indicators have continued to pick up, reflecting the rebound in economic activity on the domestic front.

Although business and consumer sentiments softened on the back of the surge in COVID cases in the early months of 2021, the rollout of the vaccination programme has increased optimism about the future and will further add a boost to the anticipated recovery in growth.

Even though private sector credit growth remains generally weak due to the pandemic, the rebound of input supplies evidenced by increased non-oil imports should support the ongoing rebound in economic activity.

Results from the Bank’s latest confidence surveys conducted in February 2021 showed some softening of both consumer and business sentiments. The softening of consumer confidence reflected heightened concerns about the potential re-imposition of restrictions following the upsurge in COVID-19 cases in the first two months of the year.

Similarly, business sentiments about the general economic situation also deteriorated on concerns that re-imposition of restrictions would further have detrimental consequences on the attainment of their short-term goals.

However, with the commencement of the vaccine roll out and gradual lifting of remaining restrictions, the expectation is for both business and consumer confidence to rebound.

 

 

Adnan Adams Mohammed

The government has reiterated its intentions of taxing online platforms (digital marketing) as a top priority area to generate additional revenue.

 

The finance minister has posited that, under revenue generation, the issue of tax exemptions, alongside harnessing revenue from property rates and digitalisation “are going to be key areas for me.”

 

Last year, there were rumours that government was planning to tax the nascent but rapidly growing section of the services sector of the economy but the government denied the rumours after some Ghanaians in the IT sector rejected the said plans. However the government is this time round bold and resolute on the introduction of the digitalisation tax.

 

“Let me assure you that these three will be areas of keen interest to ensure domestic revenue mobilisation,” Ken Ofori-Atta said during his vetting.

 

When pressed on the lack of progress on legislation in the form of the Tax Exemptions Bill, Mr. Ofori-Atta retorted that work had been done.

 

“A lot has been done between 2017 and 2020 and we are grateful for that. Some things are yet to be done and these are the three I am committing to us doing before that time,” he said.

 

The government in the past has raised concerns with the amount of money lost from tax concessions.

 

In March 2019, the Minister of Finance, Ken Ofori-Atta submitted the Tax Exemptions Bill to Parliament.

 

Cabinet also amended the process for approving exemptions to include compulsory clearance by the Ministry.

 

The object of the Bill is to rationalise the current exemptions regime on taxes, levies, fees and charges to improve domestic revenue mobilisation.

 

This is to be achieved by consolidating existing statutory provisions on tax and other exemptions and providing for the administration of exemptions.

 

Data from the Ministry of Finance indicates that tax exemptions with respect to import duties, import VAT, import NHIL, and Domestic VAT had grown from GHS392 million in 2010 to GHS4.66 billion in 2018.

 

The Ghana Revenue Authority said it planned to review the count
ry’s tax exemption laws to address revenue losses.

 

The GRA was concerned that the wholesale exemptions have resulted in exploitation where some beneficiaries eventually evade taxes completely.

 

The exemptions are mostly granted to businesses coming into the country through the Ghana Free Zones Authority (GFZA), GIPC as well as other specialised institutions.

 

 

 

Adnan Adams Mohammed

 

The National Identification Authority (NIA) and the Ghana Revenue Authority (GRA) have begun the migration of Tax Identification Numbers from the GRA database onto the NIA Card database effective April 1, 2021.

 

In line with the Government policy to replace the Tax Identification Number (TIN) with the Personal Identification Number (PIN) on the Ghana Card, the NIA is co-locating with the GRA to afford Ghanaians aged 15 years and above who have not yet registered for the Ghana Card the opportunity to do so.

 

NIA is currently operating 14 Registration Offices at the premises of the GRA across the country. However, it cautioned Ghanaians who have already registered for the Ghana Card not to present themselves at any of these offices for re-registration as this  would amount to a criminal offense.

 

“Ghanaians who have already registered for the Ghana Card are not to present themselves at any of these offices for re-registration as doing so would amount to a criminal offense, and such offenders shall be liable for prosecution”, a joint press release from NIA and GRA captured.

 

The NIA assures registered Ghanaians yet to receive their cards that the cards will be issued to them at the NIA offices in their Regional and District Capitals when the permanent offices are established effective 1st June 2021.

 

Other services to be rendered by the permanent NIA Regional and District offices include:

 

 

Read full statement below:

 

PRESS RELEASE

National Identification Authority Co-locates with Ghana

Revenue Authority towards Tax Identification Number

replacement with Ghana Card Number

 

Wednesday, 31st March 2021

 

It is announced for the information of the general public that, from Thursday 1st April 2021, the National Identification Authority (NIA) will operate 14 Registration Offices at the premises of the Ghana Revenue Authority (GRA) across the country.

 

In line with the Government policy to replace the Tax Identification Number (TIN) with the Personal Identification Number (PIN) on the Ghana Card, this co-location strategy with the GRA will afford Ghanaians aged 15 years and above who have not yet registered for the Ghana Card the opportunity to do so.

 

Ghanaians who have already registered for the Ghana Card are NOT to present themselves at any of these offices for re-registration as doing so would amount to a criminal offense, and such offenders shall be liable for prosecution. The NIA assures registered Ghanaians yet to receive their cards that the cards will be issued to them at the NIA offices in their Regional and District Capitals when the permanent offices are established effective 1st June 2021.Other services to be rendered by the permanent NIA Regional and District offices include:

 

i. Continuous registration of all citizens from age zero to infinity free of charge;

ii. Registration of all foreigners legally and permanently resident in Ghana

at a fee;

iii. Replacement of lost or damaged cards at a fee; and

iv. Updating of personal records or data in the National Identification Register (NIR).

 

Members of the general public are entreated to cooperate with both officers of the NIA and GRA to ensure successful operations at all the 14 offices within the GRA premises.

 

End

 

SIGNED

Abudu Abdul-Ganiyu

Head, Corporate Affairs

 

 

Adnan Adams Mohammed

 

As Ghana reopen its point of entries after some months of closure due to COVID-19, arriving passengers at the Kotoka International Airport are required to take a PCR test for the virus and receive results within 15 minutes.

 

There will be no mandatory quarantine as well, as it has been the normal prior to the commercial opening of the ports and borders.

 

The government has said, over 70 sampling collection booths have been set-up at the upper level of the Arrival Hall which test passengers and results will ready between 12-15 minutes. The state-of-the-art laboratory will transmit the results electronically to the port health stations in the main arrival hall before a passenger gets there.

 

“We have done our best, the service providers of GACL have worked throughout the night and we are hopeful that after the simulation exercise on Friday and Saturday, we will be able to open by September 1, 2020”, Minister of Aviation, Joseph Kofi Adda disclosed during a tour of the facilities at KIA, last week, to ascertain the level of preparedness.

 

To this, passengers who will test negative with the PCR tests will then be cleared by Port Health to Proceed to the immigration counter and admitted into Ghana.

 

Passengers with positive PCR tests will be handed over by port health authorities to health professionals stationed at the facility to be transported to treatment or isolation centres.

 

By this arrangement, all arriving passengers who test negative will not bear the additional burden of an expensive 14-day quarantine, as has been the case with the many repatriation flights undertaken within the past few months.

 

Passengers are, however, expected to bear the cost of the PCR test estimated to be between GH¢200-400.

 

It will be recalled that the President, Nana Addo Dankwa Akufo-Addo, tied the re-opening of Terminal 3 of the Kotoka International Airport (KIA), possibly on September 1, to the country’s ability to test each passenger upon arrival.

 

The Noguchi Memorial Institute for Medical Research of the University of Ghana, therefore, began testing the efficacy of a COVID-19 Polymerase Chain Reaction (PCR) Detection Kit, to be deployed for testing in-bound international passengers when the airport is re-opened next month, days ago.

 

Also, Passengers travelling from Ghana to other parts of the world would be required to take a PCR test 72-hours prior to departure and present the negative PCR test to port health officials for verification before they are allowed to complete departure formalities.

 

Wearing of face mask is compulsory for all passengers except children under six years and for medical reasons-which must be proven.