The Ghana Revenue Authority has cleared Jubilee operator Tullow Oil of allegations of tax evasion as published in yesterday’s edition of the Daily Graphic.
The paper in that story, indicated that the country is losing millions of dollars in tax revenue due from expatriate workers employed by oil companies.
According to the report, workers contracted by Tullow and other partners in the Jubilee Field are able to take advantage of their temporary immigration status to avoid paying tax, suggesting that this is done with the connivance of the companies.
But a letter from the Ghana Revenue Authority to the Daily Graphic and copied to Joy Business said Tullow has done nothing wrong.
The letter, signed by the Acting Head of Public Relations and Tax Education, Kwasi Bobie-Ansah, said, “We write in response to your front page banner headline ‘Ghana Losing Millions In Income Tax Revenue’’ in the Monday October 11th issue of the Daily Graphic. We wish to state that the Ghana Revenue Authority (GRA) administers taxes in accordance with the tax laws of the country. Therefore, due process is followed in the mobilization of tax revenue. Taxation of the expatriate staff of the oil companies is governed by PNDCL 188 and the various Petroleum Agreements with the oil companies. For the avoidance of doubt, we will like to quote Section 28 of PNDCL 188 which deals with the taxation of expatriate employees.”
“It states, ‘unless, and to the extent that Petroleum Agreement provides in respect of any expatriate employee employed by a Contractor or Sub-Contractor carrying on exclusively petroleum operations, the gains or profits of such employee shall be liable to income tax and the withholding of tax under the laws of Ghana’. In order to erase any negative perception that might have arisen as a result of your publication, we quote Art. 12.8 of the GNPC Model Petroleum Agreement which governs the expatriate staff of the oil companies, including those on short term, that is, for 28 days as published in your lead story. It states that ’The Ghana Income Tax law applicable generally to individuals who are not employed in the petroleum industry shall apply in the same fashion and at the same rates to employees of Contractor, its Affiliates and its Subcontractors: provided, however, that Foreign National Employees of Contractor, its Affiliates and its Subcontractors shall be exempt from the income tax and withholding tax liabilities if they are resident in Ghana for thirty (30) days or less in any Calendar Year.’’
The letter stated that, “It is clear from the above law that the incomes of expatriate staff who stay up to 30 days cannot be subjected to tax. It is pertinent however, to state that the permanent expatriate staff of oil companies in the country have complied with the tax laws and the GRA has no problem at all with them.”
Managers of the Daily Graphic are yet to comment on the latest development.