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May 17, 2018 | Business & Finance

About $29,000 Discrepancy Discovered In 2015 GHEITI Report

By Philip Nanfuri | JoyBusiness
About $29,000 Discrepancy Discovered In 2015 GHEITI Report

The Ghana Extractive Industries Transparency Initiative (GHEITTI) launched a report chronicling the two critical areas of the extractive industry, namely the mining, and Oil &Gas sectors in Accra.

In the Oil & Gas sector the report revealed a net discrepancy of $ -289,381 was obtained between company payments and government receipts.

Causes of the discrepancies in the Oil & Gas sector

A number of companies in the sector such as Hess Exploration (Ghana) Ltd. and Kosmos energy HC recorded discrepancies in payment of technology/training fees and corporate tax.

Kosmos Energy HC reported corporate tax payment of $11,740,696 against $ 11,730,107, a difference of $10,589. Kosmos attributed that to tax credit that it reported.

With regards to Hess Exploration (Ghana) Ltd, GNPC reported receiving an amount of US$300,000 from the company as training fees, whereas Hess Exploration (Ghana) did not report any such payment.

The report also revealed that the stages of implementation of Annual Budget Funding Amounts (ABFA) funded projects were not reported which was in contravention of section 48(b) of the Petroleum revenue management act as amended. (PRMA Act 815)

Mining sector
On the mining sector, the report documented the state of dividend payments by mining companies to the government.

According to the report only two companies out of about 15 large scale companies engaged in the exploration of minerals paid dividends during the period under review, Jan-Dec 2015.

These companies were Gold Fields Ghana Ltd and Ghana Manganese Company Ltd.

The dividend payments as a source of government revenue has not been consistent. The recommendation from the report is for government to review its policy on the 10% carried interest (non-contributory shareholding) in all mining enterprises and replace this revenue source with a more reliable source of revenue.

The report also highlighted the benefits of these sectors to the Ghanaian economy and how government can maximize and utilize revenue from these sectors.

Benefits of sectors
With the oil & gas sector, the report revealed the petroleum sector contributed to 4.1% of Ghana’s GDP and generated $396 million in revenue to the state.

Despite these benefits, the sector is plagued with issues such as discrepancies or differences in the amounts paid as revenue to the government and the amounts of taxes these petroleum companies pay.

The mining sector accounted for 1.2% of the country’s GDP and minerals made up 31% of total exports in 2015. The sector contributed GHC 1, 285 million to government revenue in 2015.

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