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General News of Thursday, 14 July 2016

Source: thefinderonline.com

GRA needs support to fight transfer pricing - Report

The Natural Resource Governance Institute (NRGI), an independent, non-profit organization says staff of the Transfer Pricing Unit at the Ghana Revenue Authority (GRA), needs specialized audit training to fight tax avoidance and transfer pricing, particularly in the extractive industry.

According to the institute, the training will equip the staff with the capacity to detect and prevent illicit financial flows resulting from transfer pricing.
This recommendation was contained in a report from a study conducted by the NRGI. The report said the staff also needs training on the valuation of intellectual property.

Speaking at the launch of the report, tax consultant Abdallah Ali-Nakyea, said though they staff of the Authority had received some level of training, it was still far from enough.

He said: “every person in GRA should at least have a feel of transfer pricing because they will have the firsthand interaction with the tax payer’s records and they will have to be able to point out whether there is any suspicion of a transfer pricing happening and refer it to the transfer pricing unit, which will then have the experts who can dig deeper.”

Consultant for NRGI Alexandra, Readhead said companies take advantage of inadequate and weak tax administration in developing countries to engage illicit financial flows which costs the countries millions of dollars every year. She said though Ghana has made progress in terms of transfer pricing, the lack of capacity among the staff of GRA was a huge challenge in fighting the illicit financial flows.

Ms Readhead recommended inter-agency joint order of mining companies. She said, rather than spending resources training the staff at GRA,it will make more sense for GRA to use expertise at the mining and petroleum commissions.

“We have plenty of mining engineers that are being paid by the government of Ghana right now so why can’t we move towards having inter-agency joint orders of mining companies. Why couldn’t we form a joint order team between the minerals commission and the GRA?” Ms. Readhead quizzed.

Mr Edward Gyamerah, head of policy at GRA, said the authority was going to take a second look at the Transfer Pricing regulation, particularly with regard to documentation requirement. He said this will help identify the challenges facing its implementation.

Mr Gyamerah said: “from policy point, what we intend doing is we want to look at the transfer pricing regulation 2188. The transfer pricing regulation that we currently have was done when we had the old income tax law. Now we have a new income tax law so we need to look at the regulation again and see where the provision will sit in.”