Co-chairman of the Ghana Extractive and Transparency Initiative, Dr Steve Manteaw, has urged the Registrar General’s Department to quicken the implementation of the Beneficial Ownership Register.
He said the country was losing millions of cedis in taxes due to the absence of the register and its implementation would therefore plug some loopholes.
The Beneficial Ownership Register is expected to keep accounts of politically exposed persons and others who are owners or beneficiaries of certain companies but keep their identities anonymous when bidding for government contracts.
Mr Manteaw was speaking at an event organised by the Tax Justice Coalition-Ghana on the theme: “The Beneficial Ownership and Right to Information Act: what role and opportunities are there for journalists in curbing illicit financial flows in Ghana?”
He said secret ownership structures had enabled some extractive companies to evade payment of tax and also hidden problems ownership posed for honest companies, as they did not know who they were doing business with.
He said the risk of anonymity of ownership created wealth in the pockets of a few at the expense of advancing development to the benefit of the larger society.
Narrating an incidence which led to the country losing almost GH¢16 million, he alleged, saying, “I had a hint that there were some irregularities around procurements in respect of the Atuabo Gas Processing Plant. So, I raised this concern with the Ghana Revenue Authority (GRA). The basis of my argument was that there was a company registered in Dubai and I discovered that the principal director of that company bore the same name as the general manager of Sinopec Ghana, which means that Sinopec was trading with itself.
“It is not really criminal to trade with your related party, but the rules are that the arm’s-length principle must be observed to ensure the right prices are quoted and are consistent with global prices in respect of similar goods and services. This we couldn’t establish, because the transaction was on the blind side of the GRA. Subsequently, when GRA investigated the matter based on my allegations, it was confirmed that there had been some transfer pricing manipulations and prices had to be readjusted to the international levels. And in the process, GH¢16 million was raised in tax payments from the company.
“And so this is how we could have lost GH¢16million if we hadn’t been vigilant in exposing the fact that people behind the company in Dubai were the same people behind it in Ghana. So, beneficial ownership allows you to block revenue leakages and also prevent conflict of interest situations, especially in contracts,” he narrated.
Dr Manteaw also noted that the Right to Information (RTI) Law in its current form would not fully support efforts at countering illicit financial flows.
He said the law would have to be used together with other transparency legislations such as Beneficial Ownership, Open Contracting and the Petroleum Register to achieve its purpose.
He said the RTI had some exemptions that were not healthy to the implementation of the law.
Some of the exemptions include information that affects the security of the state, information relating to Cabinet, information relating to law enforcement and public safety, and information affecting international relations.
“I do not see the uniqueness of the RTI Law in the fight against corruption in the country, so we will continue to use the 1992 Constitution in addition to fight the menace.”
Financial bleeding register
The Tax Justice Coalition also used the opportunity to launch the Financial Bleeding Register, which will be in the form of a website that will compile malfeasance and corruption occurring in the country for the attention of the public.
The Chairman of the Tax Justice Coalition, Mr Vitus Azeem, commended journalists for their efforts in educating the public on issues of taxation and illicit financial flows in the country.
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