Agreement to combat fiscal fraud signed

Ghana and the Netherlands have signed a memorandum of understanding (MoU) for the automatic exchange of tax information in order to avoid and combat fiscal fraud, and to ensure tax compliance.

The purpose of the agreement was to assist the Ghana Revenue Authority (GRA) in its development toward a modern tax and Customs administration, in accordance with international standards as developed by international tax institutions.

The agreement will allow the tax authorities of the two countries to automatically provide each other with information about income from immovable property earned by residents of each country, dividends, interest, directors’ fees, and income of artists and sportsmen.

It is the first to be signed between the Netherlands and an African country and the seventh in the world. Commissioner-General of the GRA Mr. George Blankson initialled for Ghana, while Mr. Hans Docter initialled for the Netherlands.

Mr. Blankson said the two countries’ efforts at fighting tax evasion through improvements in transparency and exchange of information will lead to the discovery of concealed offshore accounts and assets and improve tax cooperation.

He explained that the cooperation between the two countries on tax matters dates back many years, and that the two countries have signed and ratified a Convention for the Avoidance of Double Taxation (DTC) and the prevention of fiscal evasion since 10th March 2008.

"Through the operation of the DTC, the Netherlands Tax administration has established spontaneous information with the GRA. This has helped the GRA in tracking tax evasion and avoidance. In 2014, the Netherlands Tax Administration and the GRA signed an MOU on a broad range of cooperation in Tax matters.

"In furtherance of the MoU, a team from the GRA met their counterparts from the Netherlands Tax Administration in Amsterdam during October of 2014 to negotiate and initialled an MOU on the automatic exchange of information."

The Multilateral Convention on Mutual Administrative Assistance in Tax Matters (MAC) and the DTC are legal instruments for the exchange of information, and has traditionally been the international standard for cooperation in tax matters. However, 2014 has seen the creation of one common global standard for automatic exchange of information.

Mr. Docter said the relationship between the Netherlands and Ghana is changing from being development-led to a trading one.

“Since our economic relationship becomes increasingly important, an efficient exchange of information is essential. At the same time it is important for the government to increase its revenue collection.

“A healthy financial situation is an important condition for the trade and investment relationship between Ghana and the Netherlands to flourish. It will all contribute to our common goal: to grow together both in trade and investment.”

He said theNetherlands is to make similar arrangements with other African countries and that it has signed MoUs on the automatic exchange of information for tax purposes with 19 countries. The first one was with France in 1996 and the last one with Italy.

He said the Netherlands attaches very high importance to avoiding and combatting fiscal fraud as well as ensuring that tax is being paid in the countries entitled. Signing this MoU will be a great step forward.

“Besides signing this MoU, Ghana and the Netherlands are currently collaborating in other areas to increase revenues and avoid and combat fiscal fraud. So the Netherlands and Ghana are reviewing the tax treaty on double taxation to include an anti-abuse clause. This will make it more difficult for multinational companies to evade taxes.”

He added: “Dutch tax inspectors work closely together their Ghanaian counterparts to train them on auditing multinational companies in order to combat tax evasion through transfer pricing. To increase Customs revenues, on the one hand, Dutch Customs officers assist Ghanaian Customs officers to reform in areas such as valuation and classification, and support trade facilitation.

“On the other hand, we provide support to the GRA through the Good Financial Governance Programme together with Germany and Switzerland.”