The 2016 Flagbearer of the Convention People’s Party (CPP), Ivor Greenstreet, has called on President Nana Akufo-Addo to renegotiate all agreements with companies that offer incentives that do not benefit the people of Ghana.
Mr Greenstreet is advocating an end or significant reduction in “tax holidays and tax breaks we give mining, oil, free zone and other multinational companies”.
He made these remarks at the University of Development Studies (UDS) in Tamale on Tuesday, August 22 during a speech delivered at the Annual Delegates Conference of the University Students Association of Ghana (USAG) on the theme: “Exploring alternative avenues to fund university education.”
He stated that the investment policies of the governing New Patriotic Party (NPP) and the opposition National Democratic Congress (NDC) which had been exactly the same year after year had been to offer tax incentives to attract foreign direct investment.
For him, “No real gains have been achieved from this policy and instead our trade taxes have declined.”
He said studies have shown that Ghana loses more than US $ 1.5 billion annually as a result of tax incentives which he said was over half the entire government of Ghana budget for education.
According to him, research had shown that it is not tax breaks that attract foreign investment, but rather a skilled workforce, good infrastructure, an attractive fiscal environment and law and order adding, “They attract investment far more effectively than tax break.”
He provided details of the millions of dollars the nation had lost to international companies through tax exemptions and incentives as well as poorly-negotiated agreements.
“In July 2011, in the oil sector when the EO Group sold its 3.5% stake in Kosmos to Tullow Oil, worth some $300 million, it never paid the 10% tax amounting to a loss of $30 million. Additionally, when Sabre Oil sold its 4% share in Tullow Oil to PetroSA it never paid its 10% tax on a $365-million-dollar deal and another $36 million dollars was lost.
In the mining sector, he said, there are stability agreements which have clauses that freeze the tax laws of Ghana for periods between 10 and 15 years. The revenue losses here, he said, have ran into the hundreds of millions of dollars. He said that those were especially the case for Newmont and AngloGold Ashanti and more recently Goldfields Ghana.
“The incentives are supposedly to help those companies recoup their investment,” he explained.
Mr Greenstreet was of the view that the very poorly-negotiated Newmont agreement of 2003 was later altered with an improved agreement ratified by Parliament in 2015.
“However, not learning from the past, another very poorly-negotiated agreement with Goldfields was ratified in 2016 with the connivance of both NDC and NPP,” he underscored.
He stated that the agreement was tabled in Parliament on 16th March 2016, referred to the Select Committee on Mines and Energy the same day, and they incredibly reported back the following day, 17th March. Parliament waived the Standing Order Requirement for a 48-hour wait. The motion for approval was out immediately at 9.30 pm and the Goldfield agreements were ratified 10 minutes later at 9.40 pm.
“… A 10-minute discussion one day after a complex agreement had been tabled. All to allow for a reduction in taxes and royalties for a multinational mining company and you are wondering why your University education is not free? And this was after experts had objected to the terms,” he lamented.
Explaining further, he said between 2011 and 2012, “Ghana lost another $100 million dollars due to another stability agreement. The multinational SINOPEC which constructed the Gas Infrastructure Project didn’t pay corporate income tax, didn’t pay import duties and didn’t pay VAT.
“The list goes on and on and on and it is endless meanwhile, we the ordinary Ghanaians are forced to pay indirect taxes which pay for the roads, communication and other public infrastructure that these same multinationals use for free and which same multinationals also dodge tax in addition.”
Mr Greenstreet added: “I would urge the President that let our discussions be as he said; about making our Independence meaningful. Discussions about our political independence are for PhD thesis. The independence we have to seek now to achieve those lofty and worthy ideals to which he referred is greater economic independence. This greater economic independence can be achieved and we therefore urge him to do so, by renegotiating all agreements with companies that offer incentives that do not inure to the benefit of the people of Ghana and end or significantly reduce tax holidays and tax breaks we give mining, oil, free zone and other multinational companies. Because, for too long, our people have been cheated by their leaders and the people are suffering and it is time for Ghanaians to access a greater share of the wealth of this nation. We believe that education and university education can be provided free and must be provided free and would be provided free under a government of the Convention People’s Party (CPP) that truly and honestly believes in social investment that cares for the people.”
Source: Ghana/AccraFM.com
