CSO Budget Forum lauds Gov’t’s intention to enforce capital gains tax payment by IOCs
The CSO Budget Forum has lauded government for indicating its willingness to enforce payments of capital gains tax and additional oil entitlements by International Oil Companies (IOCs) in the 2023 budget.
According to the Forum, enforcement of payment of capital gains tax and additional oil entitlements will go a long way to improve on revenue generation from the oil sector.
Speaking to norvanreports in an interview on Thursday, December 8, 2022, Dennis Gyeyir of the CSO Budget Forum noted that, since the country started mass oil production, government has failed to take capital gains tax from IOCs, particularly on acquisitions made by the IOCs.
Adding that, government loses millions of dollars through its inability to enforce payment of capital gains tax.
“Anytime there is acquisition by an IOC, government fails to enforce payment of capital gains tax by the IOC, there have been quite a few acquisitions in the oil sector space and in all instances nothing was paid to government.
“In the recent acquisition involving Anadarko and Kosmos Energy, government is estimated to have lost some $164m by not enforcing payment of capital gains tax by Kosmos.
“And that amount is ten times more than the revenue we generate through surface rental payments from IOCs,” said Mr Gyeyir speaking on the sidelines of the Post-2023 Budget Analysis by the CSO Budget Forum.
Total revenue generated from oil production comprising lifting proceeds of the Ghana Group, surface rentals, interest on PHF account and corporate income taxes for the first half of 2022 amounted to $731m.
Of the aforementioned oil revenue for H1 2022, the Annual Budget Finding Amount (ABFA) received $183.02 million whiles Ghana Stabilisation Fund (GSF), Ghana Heritage Fund (GHF) and GNPC received allocation of $273.02 million, $117.01 million and $173 million respectively.
During the period under review, a total amount of $187.33 million was received as other income for surface rental, corporation income tax and PHF interest.
The amounts received comprise $0.69 million for surface rental, $186.34 million for corporation income tax and $0.30 million for PHF interest.
The Post-2023 Budget Analysis by the CSO Budget Forum, sought to identify proposals made to the Finance Minister by the Forum and factored into the 2023 budget statement read on November 24, 2022 by the Finance Minister, Ken Ofori-Atta.
