Day: November 27, 2023

An Accra High Court has issued a landmark ruling on the tax assessment of Maersk Drillship IV Singapore, declaring that its income arising from its Ghanaian Permanent Establishment is assessable, rejecting the company’s claim of exemption under the Petroleum Agreement.

The total money involved is a substantial sum of $15.5 million ($15,513,221.16) in tax revenue.

This comprises $12.8 million ($12,805,543.20) in direct taxes and $2.7 ($2,707,607) million in indirect taxes.

Breaking down the figures, GRA has established an official exchange rate of GH?11.5668 to the dollar.

Utilizing this conversion rate, the total tax revenue of $15,513,221.16 transforms into GH?179.4 million (GH?179,438,326.513488).

The court, comprising Justices Mrs Janapare A. Bartels-Kodwo, Alex Poku-Acheampong, and Jerome Noble-Nkrumah, delivered the judgment in response to an appeal filed by Maersk Drillship IV Singapore.

The crucial issues addressed by the court included determining the party whose income was under assessment, th
e assessability of the income, and whether the income was exempt from income tax under Ghanaian law and the Petroleum Agreement.

Maersk Drillship IV Singapore contended that the assessed income was related to its business operations and, therefore, exempt from further taxation, citing provisions in the Petroleum Income Tax Act and the Petroleum Agreement.

However, the Ghana Revenue Authority (GRA) disagreed, arguing that the income in dispute belonged to Maersk Drillship IV Singapore as a distinct entity separate from its Ghanaian registered external company.

After analyzing the facts and applying the law, the High Court determined that the income in question was that of Maersk Drillship IV Singapore, a separate legal entity from its Ghanaian Permanent Establishment.

The court established that this income, remitted by its Ghanaian Permanent Establishment, is assessable under Section 3 of Act 896.

The court further clarified that under Section 3(2) (b) of Act 896, non-resident entities earning income thro
ugh a Ghanaian permanent establishment are subject to Ghanaian income tax.

Since the income in question arose from the Ghanaian permanent establishment of Maersk Drillship IV Singapore, Section 3(2) (b) of Act 896 logically applies, making the income assessable for tax under the Income Tax Act.

Regarding the exemption from taxation, Maersk Drillship IV Singapore argued that, under the Petroleum Agreement, a portion of its business income withheld by its contractor incurs no further tax liabilities.

GRA countered, emphasizing that the shareholders of Maersk Drillship IV Singapore are the ones being assessed, and branch profit taxes do not apply to the company or its shareholders.

The court clarified that the income being taxed does not pertain to Maersk Drillship IV Singapore but to its Ghanaian Permanent Establishment, a separate legal entity.

The ruling explained that the income earned by the Ghanaian Permanent Establishment is not subject to further taxes under the Petroleum Agreement when remitting pr
ofits to its parent company.

However, the court stated that a non-resident entity earning income from a Ghanaian permanent establishment is earning income as contemplated under Section 3(2) (b)(ii) of Act 896, and, therefore, Section 60 of Act 896 applies, making the income of Maersk Drillship IV Singapore from repatriated profits of its Ghanaian Permanent Establishment liable to branch profit tax.

Source: Ghana News Agency

An Accra High Court has quashed Office of the Special Prosecutor (OSP’s) report that accused two former Ghana Revenue Authority (GRA) Commissioners of wrongdoing in the famous Labianca case.

Colonel Kwadwo Damoah, a former Commissioner of GRA (Customs Division) and Joseph Adu- Kyei, a former Deputy Commissioner of GRA (Customs Division), were allegedly accused of using their positions to grant favourable tax treatment to Labianca Company, a frozen food firm owned by Jacqueline Buah Asomah Hinneh, a Council of State Member.

The two Commissioners, last year, dragged the OSP to court contending that the OSP’s report had caused damage to their reputation and same had no merit.

The court presided over by Mr Justice William Boampong at the General Jurisdiction (High Court Division) in its ruling awarded cost of GHC 10,000 against the OSP.

The court held that the OSP exceeded its mandate in making its adverse findings against the two Commissioners.

The court noted that OSP acted ultra vires by purporting to ma
ke adverse findings against the Commissioners and further publishing the adverse report in the public domain thereby subjecting the applicants (the Commissioners) to public opinion trial.

It, therefore, quashed certain aspects of the reports relating to the applicants (the Commissioners) and granted an order restraining the OSP from further investigating the two Commissioners in the matter.

Mr Bob Sanyalah, the applicants lawyer, told journalists that he was elated over the ruling of the High Court.

The two Commissioners had gone to court praying it to dismiss the investigative report of the OSP relating to activities of Labianca Company.

Col. Damoah contended that the OSP’s report was targeted at him in person and same was to ‘bring him down’.

In the case of Adu-Kyei, the OSP’s report cited him for issuing unlawful customs advance ruling leading to the reduction of intended imports between the range of five to 10 percent to Labianca.

The two disagreed with the OSP’s report and proceeded to court to con
test the findings.

GNA Court quashes OSP’s report implicating Col Damoah, another in Labianca Case

By Joyce Danso, GNA

Accra, Nov. 27, GNA- An Accra High Court has quashed the Office of the Special Prosecutor (OSP’s) report that accused two former Ghana Revenue Authority (GRA) Commissioners of wrongdoing in the famous Labianca case.

Colonel Kwadwo Damoah, a former Commissioner of GRA (Customs Division) and Joseph Adu-Kyei, a former Deputy Commissioner of GRA (Customs Division), were allegedly accused of using their positions to grant favourable tax treatment to Labianca Company, a frozen food firm owned by Jacqueline Buah Asomah Hinneh, a Council of State Member.

The two Commissioners, last year, dragged the OSP to court contending that the OSP’s report had caused damage to their reputation and same had no merit.

The court presided over by Mr Justice William Boampong at the General Jurisdiction (High Court Division) in its ruling awarded the cost of GHC 10,000 against the OSP.

The court held that the O
SP exceeded its mandate in making its adverse findings against the two Commissioners.

The court noted that OSP acted ultra vires by purporting to make adverse findings against the Commissioners and further publishing the adverse report in the public domain thereby subjecting the applicants (the Commissioners) to a public opinion trial.

It, therefore, quashed certain aspects of the reports relating to the applicants (the Commissioners) and granted an order restraining the OSP from further investigating the two Commissioners in the matter.

Mr Bob Sanyalah, the applicants’ lawyer, told journalists that he was elated over the ruling of the High Court.

The two Commissioners had gone to court praying to dismiss the investigative report of the OSP relating to activities of Labianca Company.

Col. Damoah contended that the OSP’s report was targeted at him in person and same was to ‘bring him down’.

In the case of Adu-Kyei, the OSP’s report cited him for issuing unlawful customs advance ruling leading to the redu
ction of intended imports between the range of five to 10 per cent to Labianca.

The two disagreed with the OSP’s report and proceeded to court to contest the findings.

Source: Ghana News Agency

The Monetary Policy Committee (MPC) of the Bank of Ghana on Monday maintained the policy rate at 30.0 per cent for two successive meetings.

Dr Ernest Addison, the Governor of the Central Bank, said the Committee noted that tighter financing conditions, slower growth in the manufacturing and services sectors, and China’s slower recovery were exerting some moderating influence on global economic activity.

The Governor was speaking at a press briefing after the 115th MPC meetings in Accra.

The Committee deliberated on global and domestic macroeconomic developments, including the implementation of the IMF-supported Extended Credit Facility programme for the first six months of 2023 and assessed risks to the inflation outlook.

He said earlier aggressive policy tightening by advanced economies’ Central Banks had contributed to the dampening of inflationary pressures with headline inflation decelerating in many of the economies.

He said this had led to a pause in the tightening cycle, but core inflation remain
ed high and was declining slowly due to strong labour markets.

The Governor said Central Banks were expected to maintain policy rates at high levels for much longer periods to contain the still-elevated inflation levels relative to targets.

He said the prevailing higher policy rates, long-term bond yields, and renewed strength of the US dollar could continue to keep global financing conditions tight with consequences for Emerging Market and Developing Economies.

‘Furthermore, rising geopolitical tensions is creating uncertainty about crude oil prices and full crystallization of this risk could undermine the disinflation process in many economies, including Ghana,’ he added.

On the domestic macroeconomic environment, the Committee observed the broad improvements in the economy, reflecting stable exchange rates, the sustained disinflation process, and increased accumulation of foreign exchange reserves.

These developments reflect improvements in underlying policies, including fiscal consolidation, zero fin
ancing of the budget by the central bank, and relatively favourable external conditions.

He said the improvements would be sustained by the continued maintenance of tight Central Bank monetary conditions, sustained fiscal consolidation, and continued reserve accumulation supported through the Gold for Reserves programme.

On growth, domestic economic activity continues to recover, evidenced by the steady improvement in the Bank’s high frequency economic indicators.

The Governor said the CIEA was recovering from negative territory and was likely to turn positive by year end, showing a more solid rebound in economic activities.

He said the private sector credit growth, however, remained dampened due to risk aversion by banks amid tightened policy conditions and rising credit risk.

Dr Addison said with continued improvement in the macroeconomic conditions supported by declining inflation, credit conditions are expected to improve with a turnaround in credit extension to support growth.

He said the external
payment position was expected to improve, underpinned by continuous implementation of the IMF-supported programme, and the Gold for Reserves programme, among others.

He said the early completion and settlement of favourable agreement terms with bilateral creditors and commercial bondholders would help boost confidence and trigger resource flows to the economy.

‘The strong build up in reserves have provided cushion against external vulnerabilities, including the delay in the cocoa syndicated loan,’ he added.

He said the reserve build-up will even be stronger by the end of the year on receipt of the cocoa loan and disbursement of the IMF second tranche.

The Governor said sustained fiscal consolidation would be needed to place the economy firmly on the course of disinflation and economic growth.

Dr Addison said the 2024 budget statement was also designed to reinforce the ongoing fiscal consolidation.

He said the headline inflation had continued to decelerate in the past few months consistent with forecasts
, meanwhile the latest Bank forecast indicated that the disinflation process was expected to continue, supported by the current tight monetary policy stance, relatively stable exchange rate, and base drift effects.

The Committee noted that although inflation was decelerating, it remained high relative to target, therefore, there was a need to keep the policy rate tighter-for-longer until inflation is firmly anchored on a downward trajectory towards the medium-term target.

The Committee also made the following changes to unify the currency holding for the Cash Reserve Ratio requirement on foreign currency denominated deposits and domestic currency deposits for banks and the new unified Cash Reserve Ratio for total deposits (cedi and foreign currency) are to be held in cedis and this is therefore being reset to 15 per cent effective November 30, 2023.

This measure is to reinforce the Bank’s liquidity management operations to address excess structural liquidity conditions in the market and provide additional
impetus to the disinflation process.

The Committee will continue to monitor developments in the banking sector and deploy other policy tools, as and when required, to support stability.

Source: Ghana News Agency

The Presbyterian Church of Ghana (PCG) has held a Valedictory and Thanksgiving Service for the Right Reverend Professor Joseph Obiri Yeboah Mante, the outgoing Moderator of the General Assembly, at the PCG Victory Congregation, Fafraha near Adenta in Accra.

It was graced by President Nana Addo Dankwa Akufo-Addo, the Chief of Staff, Madam Akosua Frema Osei-Opare, and the Finance, Road, and National Security ministers, the Inspector General of Police, George Akuffo Dampare, and chiefs among many dignitaries.

Rt. Rev. Prof. Mante took office as the Moderator on December 1, 2018, after serving as the President of the Trinity Theological Seminary.

President Akufo-Addo eulogised the Moderator for his contribution to the development of the country and called on the Church to continuously pray for the leadership and the Government to carry out its mandate, successfully.

Touching on his achievement, Prof Mante said with the introduction of ‘Vision 1.5’, the church had increased its membership to about 1.4 million
.

He said 285 pavilions were constructed across the country to provide a welcoming environment for collective worship and the expansion of the church’s influence.

A suitable manse was constructed for the Moderator of the General Assembly while he introduced responsible and sustainable environmental practices among the various congregations of the Church.

Rt Rev. Prof. Mante led the church to provide support for PCG’s minsters serving in deprived and economically challenged communities.

He said the Presby Church had provided enormous support to the education sector of the country, currently boasting of 2,500 basic schools, 36 senior high schools, and seven tertiary institutions.

He commended all and sundry for their support and encouraged Christians not to lose touch with God’s divine presence.

He urged them to take corporate worship and their personal relationship with God seriously, since that was the only way, they would move to higher ground.

Source: Ghana News Agency

Torgbiga Adama III, Paramount Chief of Somé Traditional Area, in Ketu South has called on Somé citizens home and abroad, and philanthropists to support the area for more development projects.

He said: ‘I hope to mobilise Somé citizens, the government organisations and other stakeholders to help us motivate our teachers to teach and pupils to learn, find scholarships for our brilliant but needy pupils to study Medicine, Law, Ewe Language and Arts and improve health and sanitation, and the road network.’

Torgbiga Adama made the call at the 2023 Sometutuza, the socio-cultural and development festival at Agbozume celebrated on the theme: ‘Unifying All of Somé for Her Total Development.’

He said though he and his chiefs had made some modest gains in areas of chieftaincy, education, health and socio-economic development, ‘Somé is not yet out of the woods’ and required the support of all.

‘There are still some pockets of chieftaincy disputes here and there, health facility challenges, poor road network and the
flooding of Somé.

Torgbiga Adama said he intended to revive the ‘kete’ (kente) industry to be a more vibrant and innovative trade and indicated his readiness to work with any well-wisher to win the economic battle for Somé.

‘Somé cannot do it alone, just as you also cannot do it alone,’ the Paramount Chief said.

Former President and Flagbearer of the National Democratic Congress (NDC), John Dramani Mahama, who graced the durbar in the company of Mr Fifi Fiavi Kwetey, General Secretary of the NDC and Mr Mawutor Agbavitor, Regional Chairman, NDC among other party functionaries, donated relief items meant for flood victims in the area.

The items included 177 bags of rice, 38 cartons of cooking oil, 43 cartons of tomato paste, 45 cartons of canned fish and packs of bottled water.

Mr Mahama assured all flood victims of the NDC’s support and thanked Volta Region Members of Parliament (MPs) for standing with their people in their plight.

Saturday’s durbar which showcased the rich traditions of Somé was replete
with drumming and dancing, cultural performances, poetry recitals, a play featuring the economic activities of the people and an exhibition which flaunted the kete designs and products from Agbozume.

The festival which had returned after 19 years break due to chieftaincy disputes, had Togbi Gbordzor III, Dusifiaga of Anlo and other traditional leaders from Aflao, Ave and Klikor areas in addition to other dignitaries like MPs for Ketu South and Akatsi South, and current and former Municipal Chief Executives for Ketu South.

Source: Ghana News Agency