ECONOMIC COUNSELLORS’ DIALOGUE

The GIPC held the Economic Counsellors’ Dialogue at the Holiday Inn Hotel on the theme “ Improving the ease of Doing Business in Ghana” covering the subjects: Immigration laws, Technology Transfer Agreements & Double Taxation Agreements. At the beginning GIPC showed a movie about investors from The Netherlands in Ghana. In the GIPC marketing Ghana movie two of our own GNBCC members were interviewed complimenting Ghana and narrating their successful and longstanding investments in Ghana (African Tiger and ThinkData).

The 1st presentation was by Mr. Laud Ofori-Afrifa – Deputy Comptroller General of Operations of the Ghana Immigration Service. He talked about facilitating investors immigration issues. He told the audience that you will now obtain a residence and work permit in 7 (seven) working days in Ghana and that in future this will be reduced to 48 hours. Also rules and regulations for work and residence permits for longer periods will be improved . He complained that there are too many forgeries because too many companies are using middle men to organize permits. Also he announced the introduction of a short term work permit for instance for experts who need to install or repair a machine.

The 2nd presentation was by Mrs Naa Lamle Orleans-Lindsay, Head of the Legal Division of the GIPC. She explained about the Technical Transfer Agreements between a local and foreign company which has been part of the Ghana law since 1992. These TTA’s or mostly in place between a mother company abroad and its subsidiary in Ghana covering for instance  the provision of managerial services and personnel training. A TTA sees to it that the GIPC issues a certificate what is needed in order to transfer money from Ghana to the mother company abroad. Without a TTA no money transfer to abroad is allowed . A TTA can only be in place for 18 months and a TTA is not allowed for instance when a service or expert staff is easily available in Ghana (such as accountants or lawyers). Application fee for a TTA is GHS 11760.

The 3rd presentation was by Mr Eric Mensah – Assistant Commissioner  Legal Affairs and Treaties of the GRA on the subject of Double Taxation Treatments (like The Netherlands and Belgium have with Ghana). The principle of the double taxation treaty is that you are not taxed for the same thing in both treaty countries. Central principle remains: “pacta sunt servanda” which translate into: agreements must be kept. The treaty covers mainly income tax, wages tax, company tax and dividend tax. 

After the presentations the speakers were invited for an open discussion with and questions from the audience.

The first question was about the work permits needed for expatriate experts to work in the Oil and Gas  Industry ; the Ghana Petroleum Commission is delaying  work permits of expat staff. In answering Mr Ofori- Afrifa said that Immigration only had been informed just recently about this because apparently a lot of foreign companies are afraid of repercussions if they complain ; Ghana Immigration is now in conversation with the Ghana Petroleum Commission; this Commission is working according their local content policy.

The 2nd question was about the reasons for a TTA ; in answering Mrs Lamle  Orleans-Lindsay stated that a lot of companies want to avoid paying taxes in Ghana by inflating transfer pricing . A TTA goes against that.

In further discussions it was mentioned that the 2013 GIPC law is in the process of being revised: the capital requirements (US$ 200000 for jv, US$ 500000 for wholly owned and US$ 1 million for trading company) will be changed; each sector will have its own threshold concerning capital requirements. As such, the capital requirements  will be expunged from the GIPC law. These will be key reforms and the next step is that the new law will go to cabinet , after that it is laid before parliament and GIPC is expecting it will be implemented before the end of this year.  On a question of the audience if the revised GIPC law plus the recommendations are available so we (the chambers of commerce) can comment there was no clear answer. 

Another question was about the new local content law in the downstream petroleum sector which was approved by cabinet on the 18th of March; if the GIPC could tell the audience about its content. The GIPC did not know the content and the law would soon be going through  Parliament.

The last question was about the Freezone; why it was still called a Freezone now that the GRA had decided that  import duties have to be paid on all raw materials and input. In a Freezone 70% needs to be exported and only 30% of goods are allowed to bring into Ghana. Over this 30% you need to pay import duties.  The GRA demands now by a new law that you have to pay import duties on all 100% inputs and that at a later stage you may claim back the import duty you have paid over the 70% which is not imported. In most cases in Ghana it can be very hard to reclaim your earlier paid tax to the GRA.  The panel stated that this was done because some companies where breaching the law. GRA was now looking if it could be handled by giving sureties or an indemnity so to diminish the suffering of innocent companies.  The one who asked the question thought it was strange that the GRA decided to punish all companies when only few broke the law.

All in all it was a good and helpful GIPC event of which the questioning time after the presentations was insightful for participants as well as presenters and GIPC.

For reactions, please e-mail tjalling@gnbcc.net

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