Home » Breaking News » Ghana lost over $900M in oil royalties, taxes – Think Tank

Ghana lost over $900M in oil royalties, taxes – Think Tank

An oil and gas policy think tank, Centre for Natural Resources and Environmental Management (CNREM), has alleged that Ghana lost about $902.45 million in the oil sector because some of the oil companies paid less taxes and royalties to the country.

According to the centre, although the oil resource is in Ghana, the county makes less than 20% of the revenue from the sector.

Speaking further on the issue on the Citi Breakfast Show on Wednesday, the Executive Director of CNREM, Mr Solomon Kwakumey said his outfit had petitioned the Council of State on the matter.

He added that a meeting was subsequently scheduled where they presented their argument to the Council and the Petroleum Commission also did a presentation.

“At the meeting…the Petroleum Commission presented a report to the Council of State that Ghana had a $359 million for the six years of operation.”

He said after subjecting the Petroleum Commission’s report “to the terms of the Jubilee Field Agreement, Taxation and Accounting Principle we discovered that this is how much Ghana was losing which is $902.45. We were able to calculate how much we lost in royalties and how much we lost regarding taxes.”

Mr Kwakumey also said he has petitioned the government to move from the hybrid system and adopt the production sharing method to make more money from Ghana’s oil.

He added that if Ghana were to be practicing the production sharing agreement, at the end of the 7th year of oil production, the country would have “been earning over 11 billion dollars as against the under 4 billion dollars that Ghana has earned for the seven years of operation.”

“The hybrid system is skewed towards the collection of taxes and royalties. It is very difficult to collect taxes from multinationals. Secondly, under the hybrid system, we transfer our sovereignty and ownership of the oil to the foreign oil companies. The hybrid system is just a small modification of traditional concession…just as the way we have given out gold concessions where we get only taxes and royalties from the mining companies; it is the same old thing being applied in the oil sector.”

Mr Kawukume further explained that under the production sharing agreement, it is the output of the oil which is strictly shared between the host nation and the foreign oil company.

This he said is “because the oil is our sovereign property under the production sharing agreement you don’t transfer it to the foreigner, we still have control over it. So it is only output that is shared and not money.”

He argued that some countries including Nigeria and Libya are making more from their oil resources because they are practising the production sharing method.

 

Source:Citifmonline

x

Check Also

IMF confirms Ghana’s intention to conduct debt restructuring in 2023

The Internal Monetary Fund (IMF) has confirmed that the government of Ghana has declared its ...