Ghana to strengthen tax laws to check transfer pricing as country loses $36m every year
Ghana has drafted regulations to strengthen the country’s tax laws to deal with taxation of multinational companies and minimize the incidence of abuse of transfer pricing, Finance Minister, Dr. Kwabena Duffuor has told Parliament Wednesday November 16, 2011.
In the 2012 budget presentation to the House, he said it is estimated that developing countries lose about $160 billion every year through transfer pricing fraud.
And citing Ghana, he said recent studies in the mining sector showed that Ghana loses about $36 million a year through transfer pricing.
He indicated that the Ministry of Finance and Economic Planning and the Ghana Revenue Authority (GRA) have drafted regulations to strengthen existing tax legislation to deal with the issue.
The regulation will soon be presented to Parliament, he said.
Transfer pricing, according to the OECD relates to the determination of the taxable profits that an enterprise realises from transactions with associated enterprises.
Also known as ‘related party transactions’ it is one of the unethical means that usually multinational companies use to avoid paying taxes. They do so, by moving products or income that they generate from sectors or countries of higher taxation to sectors and countries of lower taxation in order to maximise profit.
By Emmanuel K. Dogbevi
This is long overdue and should been address years ago. Please make sure parliament speed up the process quickly. sooner the better.
about time too.Now you wonder why Ghanaians are under paid for their hard work.Pls keep up the good work and make these international company’s accountable to paying their dues
Bravo finance Minister. There’re a lot of loopholes in Ghana’s tax laws which people are exploiting to the detriment of Ghanaians. All loops should be sealed for Ghanaians to benefit from their toils.