Review double taxation agreements with 13 countries – Ali-Nakyea
Tax consultant and Senior Lecturer at the University of Ghana (UG), Dr Abdallah Ali-Nakyea, has called on the government to review tax treaties it has with thirteen (13) countries as the tax treaties are skewed in favour of Ghana’s tax treaty partners.
Dr Ali-Nakyea is of the view that there is the need to renegotiate the tax treaties so as to avoid double taxation on businesses in the country.
“Our tax laws have changed over the years from the Internal Revenue Act 2000 [Act 592], we now have the Income Tax Act 2015, [Act 896]. With the changes in the income tax and then changes in other international tax instruments like the Base Erosion and Profit Shifting and the pillars that come with it, are we able to take a second look at our existing double taxation agreement and see what revisions are needed because at the end of the day, we are trying to protect the tax base,” he said.
Supporting Dr Ali-Nakyea’s position is William Kofi Owusu Damitia, a lecturer at the University of Ghana’s School of Law, who also called on the government to adopt a universal model tax treaty to serve as a basis for negotiations.
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“To ensure that Ghana benefits from these tax treaties as they are designed to do, there is the need for us to comprehensively review them. You do not review things in a vacuum, the only way we are able to review is if Ghana is able to come to a conclusion that this is the way Ghana wants to go. Ghana’s model tax treaty must be enhanced and developed so that they can be the basis for us to negotiate going forward,” he stated.
Ghana is said to have entered into double taxation agreements with thirteen countries across the world.
The fundamental assumption which informs the tax treaty is that there will be a corresponding flow of capital between the treaty partners such that the tax revenue sacrificed by each state will even out.
Meanwhile, Dr Abdallah Ali-Nakyea, has decried the inconsistencies in the government’s implementation of tax policies.
According to him, inconsistencies in the implementation of tax policies affect the overall revenue generation ability of tax handles.
To drive home his point, Dr Ali-Nakyea made reference to the many amendments made to the Value Added Tax (VAT) Act which saw the introduction, repeal, and re-introduction of certain taxes captured under the Act.
