Ghana faces investor backlash over controversial ‘back tax’ penalties
Ghana’s attempt to raise more money through “back tax” penalties has raised concerns of a potential investor revolt.
South African Foreign Minister Naledi Pandor has warned that South African companies operating in countries where they face difficulties could disinvest, damaging their economies.
The Ghana Revenue Authority (GRA) has imposed “back tax” penalties on companies such as MTN, Tullow, Goldfields, and Kosmos Energy. The companies have all indicated that they will contest the claims made by the GRA.
The GRA has advised the companies to use internal systems to address tax disputes, and if not satisfied, to appeal to the Independent Tax Appeals Board after making a 30% payment of the surcharged back tax.
South African Foreign Minister Naledi Pandor has called for an amicable solution to the issue, to enable the approximately 100 South African companies in Ghana to operate without difficulties.
These companies have invested more than $1.4bn and provided employment for over 19,000 Ghanaians over the past decade.
Ghana is currently facing a debt crisis and a devalued currency, with inflation reaching 54%. This is not the first time that the GRA has taken such a stance, as Nigeria’s demand for $4.4bn in back taxes from pay-TV service Multichoice last year led to an acrimonious fight and an out-of-court settlement. MTN was also previously targeted.
