Ghana’s Ministry of Energy is accusing a former Chief Executive Officer of the country’s national oil company, GNPC, Mr Alex Mould, of attempting to misinform Ghanaians in his write-ups on Aker Energy and AGM petroleum agreements.
According to the Ministry, the amendments to the Petroleum Agreements of Aker Energy and AGM were to provide regulatory certainty and incentives to support the realisation of Aker’s Pecan Project and increase investment in the AGM block respectively.
“These incentives have already yielded positive results for the country as AGM recently announced crude oil discoveries following an accelerated drilling campaign,” the Ministry explained.
In his latest epistle titled: ‘Government has bestowed on all Ghanaians massive historical damage to our oil and gas sector’, the former CEO of the GNPC berated the Akufo-Addo-administration for providing what he described as sweeping tax exemptions for the Norwegian oil and gas firm.
“Sadly, these amendments also provide sweeping tax exemption for Aker and AGM, its sub-contractors and sub sub-contractors. No withholding taxes in the case of AGM itself, and a reduced withholding tax rate of 5 percent instead of the 15 percent withholding tax for any work or services or supply or use of goods, both to domestic and international transactions.
“It is reckless to exempt withholding tax for international transactions; this is akin to surrendering taxing rights to a foreign state because the foreign state will apply tax on its worldwide income and will result in permanent revenue loss for Ghana. Additionally, exempting withholding tax on domestic transactions may lead to tax evasion as the trail is lost; eventually resulting in large scale tax loss due to avoidance,” Mr Mould said.
He further argued that the non-resident companies having established a Permanent Establishment (PE) status for tax purposes would be liable for full corporate tax.
“Sadly, the amendments make it possible for non-residence Permanent Establishment (PE) to be exempted from the payment of tax at the domestic rate. This will cause a substantial tax loss as the tax exemption is for 7 years.
However, in a statement signed by the Head of Communications at the Ministry, Nana Kofi Oppong-Damoah accused Mr Mould for churning out inaccurate information.
“It is important to state that in the amendments of the AGM Petroleum Agreement, we negotiated a higher net gain for Ghana. We reduced our commercial paid interest and the subsequent exposure of GNPC but raised the free carried interest of the state. This resulted in a Benefit-Cost ratio of 19 in favour of Ghana against 11 in the original Agreement.
“The Ministry wishes to advise Mr Mould and others who conduct themselves in similar ways to contact the appropriate institutions where they lack information on any issue in the oil and gas sector. As former CEO of GNPC. He cannot rely on uninformed commentators for information on critical subjects like petroleum for the purpose of conducting analysis for public consumption. Our doors are always open,” the Ministry said.
Clink on the link below for the Ministry’s full statement
