Accra, Nov. 11, GNA — Dr Abdallah Ali-Nakyea, Senior Lecturer at the University of Ghana, School of Law, Legon, says Ghana needs to block revenue leakages and stop Illicit Financial Flows (IFFs) to revive the economy post-COVID-19.
He said this was because the pandemic had severely wrecked the economy by way of shortfalls in revenue and increased public expenditure.
Dr Ali-Nakyea made the call at the 8th Pan African Conference on IFFs and Taxation, held in Accra.
The conference on the theme was: “The Ghana we want post-COVID-19: Optimizing Domestic Resource Mobilization from the Extraction Sector for Ghana’s Transformation,” was organized by Ghana Integrity Initiative (GII) in collaboration with Integrated Social Development Centre (ISODEC), Diakonia and Tax Justice Network Africa.
He said sources of IFFs must be addressed by reducing criminal activities, corruption, and tax evasion through effective collaboration among regional and international bodies, and civil society.
“In this regard, international best practices must be adopted. Furthermore, there must be a conscious and deliberate effort at investing in data infrastructure and transparency. Inroads must be made into protecting and supporting civil society organizations, whistle-blowers and investigative journalists,” he said.
Dr Ali-Nakyea said Ghana should strengthen the capacity of its financial institutions, particularly revenue authorities and the ministries responsible for negotiating mining and petroleum contracts to monitor transfer pricing.
He said relevant law enforcement institutions must be properly equipped and empowered to monitor the sector and implement the laws.
Dr. Ali-Nakyea said it was also important for the country to improve the transparency and accountability required of companies in the extractive sector by ending secretive tax jurisdiction and tax havens.
That, he said, would require strict adherence to “publish what you pay”, in compliance with the beneficial ownership register required under the provisions of section 35 of the Companies Act, 2019 (Act 992).
“Government should also promote automatic exchange of information between competent tax authorities of Ghana and those of companies engaged in the extractive sector,” Dr Ali-Nakyea, added.
Mrs Linda Ofori-Kwafo, Executive Director for GII, said corruption was not only an issue for low income countries but equally for rich countries and that it was important actions were taken on cross border corruption, foreign bribery, tax evasion, and related illicit financial flows, which collectively deprived countries of about 1.26 trillion per year.
She said the Conference would explore strategies to strengthen coordinated Pan African action and global solidarity to stop the “bleeding” of public revenues from Africa’s extractive sectors.
Mrs Ofori-Kwafo said the GII believed that when an enabling environment was created for businesses to thrive and the private sector was well included on Government’s fiscal policies, the propensity to indulge on bribery, tax evasion and tax avoidance would be greatly minimized.
Dr Steve Manteaw from ISODEC said the extractive sector presented high money laundering and illicit financial flow risks, yet the Financial Intelligence Centre was not integrated into the permitting process to help with due diligence assessment (Know your Customer process) of applicants concerning financial security and money laundering risk assessments.
He said Ghana’s Extractive Industries Transparency Initiative report revealed that customs officers, stationed at mines to observe the gold smelting process and to record the production volumes, in many cases stayed at particular mines for more than a decade, often fed and housed by the mines and this situation, he said, could compromise the integrity, and effectiveness of the monitoring arrangement.
Dr Manteaw said where the sale of equity arrangements was not done transparently and competitively or involved public official or politicians, there tended to be a high risk of conflict of interest, leading to under-pricing, especially where the transaction was not open and above board.
“A lot of the revenue leakages in the extractive sector are as a result of weak governance. They are specifically, attributable to policy, legislative, and regulatory incoherence; lack of stringent rules and sanctions for conflict of interest-related types of corruption; Lack of proper monitoring of local content implementation; and the misuse of company anonymity in the negotiation of dubious contracts,” he said.
GNA