At the All Africa Energy Summit in Accra, Ghana’s Attorney-General and Minister of Justice, Betty Mould-Iddrisu, argued for a review of the country’s oil and gas tax regulations before commercial production commences in 2010.
She pointed out that the current legal framework for the oil sector is contained within the Petroleum and Exploration Law PNDCL 84, as supplemented by the Petroleum Income Tax Law. Under that framework, all oil investors in prospective upstream operations have concluded a petroleum agreement with the government.
All present petroleum agreements have been concluded under a system of royalties, payable by the oil company on production values. The royalty rates have not been fixed, but are negotiable between 4% and 12.5%. In addition, petroleum income tax is currently applied to profits at a rate of 35%. The tax can be levied in the form of oil or cash.
Mould-Iddrisu said the regulation and taxation of the oil sector should now be reviewed so that the government could obtain the greatest revenues from what is now a well established oil industry. The current framework was established to attract external investment for development.
She added that a new oil and gas revenue bill is being drafted by the government to manage tax revenues from the industry, whilst also ensuring transparency. Petroleum tax law has also been reviewed and is being incorporated within the general income tax law.
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