Ghana has secured a major victory in its tax dispute with oil producer Tullow Oil after an international tribunal dismissed all claims filed by the company.
The tribunal upheld in full a US$393.09 million tax assessment issued by the Ghana Revenue Authority (GRA).
According to a statement issued by Finance Minister Dr Ato Forson on September 30, the tribunal ruled that the tax assessment did not violate Ghana’s Petroleum Agreements with Tullow. It also determined that the penalty imposed by the GRA was properly applied and that the assessment was not barred by the applicable time limit.
The tribunal further ruled that the GRA’s enforcement action was lawful.
“The Tribunal ruled in favour of Ghana. It dismissed all claims brought by Tullow and upheld in full the Ghana Revenue Authority’s tax assessment of US$393,091,993.70,” the statement said.
Dr Forson commended the Office of the Attorney-General, the GRA and Ghana’s external legal counsel, Foley Hoag LLP, for their roles in defending the country’s interests throughout the proceedings.
The government said the ruling supports its position that all companies operating in Ghana, regardless of their size, are required to comply with the country’s laws.
“This outcome vindicates the position Ghana has maintained throughout: that every company operating in this country, regardless of its size, is subject to the laws of Ghana,” Dr Forson said.
The decision comes at a time when the government and partners in the Jubilee and TEN oil fields are seeking to increase production and attract further investment into the petroleum sector.
The government disclosed that it had been engaging Tullow in discussions aimed at reaching an amicable settlement of outstanding tax issues before the tribunal delivered its ruling.
Those discussions are expected to continue and will cover both the matter determined by the tribunal and a separate dispute relating to the disallowance of loan interest.
Despite the tax disagreement, the government described Tullow as an important partner in Ghana’s petroleum industry and the country’s largest petroleum producer.
It noted that Tullow’s activities in the Jubilee and TEN fields play an important role in Ghana’s energy security, domestic gas supply and the livelihoods of thousands of Ghanaians.
The government therefore said it will work with Tullow to implement the tribunal’s decision in accordance with Ghanaian law, while ensuring that operations at the two oil fields remain sustainable.
Under Ghanaian law, the GRA has the authority to determine when and how assessed tax liabilities should be paid.
The government said its priority is to recover revenues owed to the Ghanaian people while ensuring that Tullow remains financially capable of continuing its operations and investment in Ghana.
Source: mfnewsgh
