The acting Chief Executive Officer of Ghana Petroleum Commission (GPC), Mr. Egbert Faible, has signaled the readiness of the government to make new law criminalizing abuse of transfer pricing in its petroleum sector.
Abusive transfer pricing is when a company transacts business with a related party at a price which is in variance with the internationally-accepted market price in order to push profits offshore and reduce its tax bill locally.
Details show that within the few years the country had become a player in the industry; it has been losing $36 million every year to transfer pricing.
Even now, Business Hilights Ghana Bureau Chief, reports that there is currently an ongoing court case between Vodafone Ghana and the Ghana Revenue Authority over transfer pricing issues.
Ghana has a Transfer Pricing Unit under the Ghana Revenue Authority (GRA) which detects and sanctions companies found in transfer mispricing.
Currently, the act has not been seen as a crime as government had been in the habit of just retrieving money deemed excess in the transfer pricing transaction.
However, Faible noted that recent occurrences have shown the need for a more punitive measure to serve as a deterrent, hence, the move to criminalize the act.
According to him, consultations are already on with industry stakeholders for a smooth public hearing during the period of the law at the parliament.
He noted that “The commission will make recommendations to parliament and the sector minister on this matter and we will see how it goes”.