Ghana is in dire need of revenue to keep its economy afloat, and tax income is its surest bet. As talks with the International Monetary Fund drag, the state tax collector – Ghana Revenue Authority (GRA) – is on an unconventional drive to shore-up its domestic revenue to underpin the nation’s fiscal revival efforts; and this is to be done through the recovery of back-taxes that it claims are owed to the state by some multinational companies in the country.

The West African nation is currently negotiating with the IMF for a bailout; and being under pressure to inspire confidence of a sustainable economic future, the country is ramping up tax revenue collection – but the modus operandi could leave investors with a bitter taste.

Sadly, however, and relying upon external agencies as auditors, the GRA’s approach in terms of investors receiving demands for back-taxes outside the contracts they hold with the country is a matter of concern in the broader interest of future foreign direct investments.

According to the revenue mobilisation agency, four multinational firms operating in the oil, telecoms and mining sectors have failed to clear their back-taxes running into some millions of dollars to government – a claim they have unanimously rejected.

Chasing tax defaulters is not a bad thing per se, safe to say it is cracking the whip; but how the GRA handles such situations, especially those with binding contractual obligations for both parties, will either make or break the nation’s aspiration of becoming the sub-region’s investments hub.

This back-tax melee comes on the heels of an equally unpopular approach to domestic revenue collection – whereby the GRA stationed its tax officers at certain shops across the country to track the cash inflows and determine the tax payable to the state; an action that triggered a closure of shops in some parts of the country.

The desperation is glaring in GRA’s unconventional tactics to raise revenue, but any attempt to milk the private sector in the guise of back-tax threatens Ghana’s investment hub agenda. Ghanaians should be concerned about investment attractiveness – the economy’s ability to attract more investments – in this time of economic woes.

Obviously, getting tough on revenue mobilisation is what everyone, including the external community, will expect to see of any ailing economy; but before such a name and shame exercise, one expects that the tax collector will act diligently and without fault.

For instance, one of the four affected companies, Tullow Ghana Limited – from whom the GRA is demanding some US$387million plus penalties, considers the action a total breach of its rights under its Petroleum Agreements and has resorted to international arbitration to bring certainty to the issue in the best interests of all stakeholders.

Quite interestingly, too, after accusing Africa’s largest wireless carrier, MTN, of evading back-taxes payment totalling US$672m, the state tax agency has pulled out of that demand.

The reason for the reversal, we are told, is to allow for reassessment of the figures it [the GRA] had earlier projected. If that is the situation, then it allows the suggestion that similar anomalies could have arisen in the case of the remaining three.

Ghana should be worried about how these tussles could affect attractiveness of the nation’s economy to foreign investments, because disregarding contractual law and inventing tax claims against serious international businesses to boost the country’s 2023 forecasts is not the answer.

Although other tax experts have argued in favour of the back-tax decision – which is understandable given the economic circumstances – one thing they have not failed to admit is the way the matter was handled could have been better; especially since the cited companies have either rebuffed the claims of GRA or identified some anomalies in the figures it has churned out. Instead of showing that there is a working tax regime, it could rather expose lapses in tax administration – which could drive investment away, erode confidence and make the problem even worse.

If GRA’s tax demands to major players in Ghana’s oil and gas firms are not amicably resolved, there is a significant threat of Ghana not attracting investors in future. Ghana must show the global investor community that no matter the current economic situation, the nation will always honour its contracts and it is a safe haven for investors.

Ghanaians stand to suffer most because this type of short-term behaviour has a ripple-effects. The four affected multinationals are also among the country’s big employers, offering jobs and livelihood opportunities to several thousands of Ghanaians aside from supporting the nation’s socio-economic development in diverse ways.

Ghanaians are already reeling under harsh economic conditions which have been compounded by government’s domestic debt exchange programme, wherein institutional and individual bondholders are being asked to defer receipt of their investments for at least another three years.

Desperate times call for desperate actions they say, but there is also a sound reason behind the “carrot and stick approach” in luring foreign direct investments into any economy; and the GRA must go about its tax collection obligations in such a manner that the gains which have been made in Ghana’s investment landscape are not undone.