GRA receives 15 pickups from Danida to enhance revenue mobilisation

The Danish International Development Agency (Danida) has handed over 15 pick-up vehicles and three working dogs to the Customs Division of the Ghana Revenue Authority (GRA) to enhance preventive operations at some of the frontier stations, for effective patrols and to close all the loopholes in revenue leakage.

The presentation was also aimed at enhancing operations in revenue mobilisation, as well as protecting the entire nation against infiltration of prohibited goods. The three working dogs are also expected to assist the Customs Division in rummaging of vehicles, identifying contraband goods on persons and packages, as well as general patrol duties.

Deputy Danish Ambassador Mr. Peter Olessen, speaking at the official handing-over ceremony in Accra, said the Tax and Development Programme has been designed to help improve the sustainability of Ghana’s public finances and that it is a reflection of the evolving relationship between Ghana and Denmark as Ghana becomes increasingly self-reliant, and  the scope for commercial relations increases.

Currently, the redesigned programme - which focuses mainly on Customs - supports some 26 projects under the GRA’s second strategic plan with training and capacity-building as well as some equipment, he said.

Mr. Olessen said although Danida has moved away from development assistance involving the purchase of vehicles and construction of buildings, it has shown flexibility in this instance because capacity-building focusing on just training, study tours and on-the-job support without further capacitating the relevant units cannot take us far enough.

“It is our hope that the capacity we build within the GRA will enable this institution to better protect Ghana’s borders, guard the revenue coffers and strengthen staff capacity to deliver on its mandate,” he said.

He said improving the GRA’s performance is critical to the economic and social development of Ghana, especially in the transition from Aid to Trade to strengthen revenue administration and make up for the possible shortfall in donor inflows when development partners exit from development cooperation.

Mr. Emmanuel Nti, Commissioner-General of the GRA, said the vehicles form part of the package earmarked for the Customs Division under the Tax and Development Programme being spearhead by Danida.

He said the vehicles will further enhance GRA operations in revenue mobilisation, as well as protect the entire nation against the infiltration of prohibited goods.

Mr. Nti said the performance of GRA is critical to economic and social development, and thanked the Danish government for its immense support.

The Commissioner-Customs Division of the GRA, Mr. Isaac Crentsil, said since 2015 the Danish government has supported the GRA in its modernisation efforts by offering technical assistance, donating printers and scanners, among others.

“The 15 pick-ups will go a long way to assist Customs preventive operations, and help it be up to the task of checking smuggling along the country’s vast borders,” he remarked.

Mineworkers shocked at contract mining ‘policy’

General Secretary of the Mineworkers Union of the TUC, Prince William Ankrah, has expressed surprise that government in one breath supports the contract mining module, and in another says its committed to decent and well-paid jobs.

This is because, according to the General Secretary of the (GMWU), contract mining exposes miners to precarious work.

Mr. Ankrah made these comments at a get-together and raffle-draw for members of GMWU after the May Day celebrations in Kumasi recently.

“Recently, the GMWU leadership was shocked to hear all of a sudden at a Ministerial meeting, that the sector Minister for Lands and Natural Resources indicated contract mining is a government policy.  Government saying contract mining is its policy is a surprise to us as Ghana Mineworkers Union leadership, because policy does not get operationised overnight.

“Is government now taking a last-minute position that contract mining is its policy because of the impasse between Ghana Mineworkers Union, GMWU and Gold Fields Ghana Limited,” he queried.

“The union thinks if it is government policy then it should have been discussed by the social partners to weigh all the options.”

He therefore called on government, as a matter of national interest, to convene without any further delay a broad stakeholder engagement forum on the Contract Mining policy to chart a road map for the sector - to help prevent any mining company from engaging in contract mining with flimsy excuses.

“My fear is that mining companies want to short-change Ghanaian mineworkers and undermine efforts made by the GMWU over the years to improve remuneration packages for Ghanaian mine workers.”

Indexation of the cedi to the dollar used for payment of remunerations to mine workers was a brain-child of the GMWU. This was after tough and fruitful engagement with stakeholders with foresight, such as the likes of Sir Sam Jonah who really blended business with workers’ interests, Prince Ankrah told GMWU members.

He promised to be tough with companies that want to toy with the plight of mine workers.

“We are not here to bust any company, neither are we going to sit down and allow any company to toy with the future of mineworkers through exploitative tendencies for their corporate greed.

“We as union leadership and members are ready to work with all stakeholders to ensure very serene labour relations. But anything that seeks to exploit the mineworker and the family, the union cannot be part of it,” he added.

Passage of mineral revenue management law advocated

The passage of a mineral revenue management law to guide the disbursement and utilisation of revenues in the mining sector has been advocated.

The Executive Director of the African Centre for Energy Policy (ACEP), Mr. Benjamin Boakye, said over the period the country had been mining there has been no framework to govern the receipts and expenditure of revenues, which needs urgent attention.

Mr. Boakye, making a call in Accra at the launch of a campaign for the proposal of a mineral revenue management law, said: “ACEP believes that the Mineral Revenue Management Law is crucial to guaranteeing more efficient management and use of revenues from the mining industry”.

He indicated that management of mineral revenue in the country has not been well organised as the country resorted to the administrative process of disbursing 10 percent of royalties to agencies and communities - adding that these processes are associated with challenges including commodity price volatility; use of mineral revenues for consumption rather than investments; absence of accountability at state institutions which have responsibility for the management of mineral revenues, among others.

He said the country is getting over GH¢1.5billion annually from the extraction of gold and other minerals, and as such it is imperative to institute effective mechanisms that ensure transparency and accountability.

“We should consider the establishment of systems for assessing and collecting mineral revenues and establish stabilisation mechanisms for insulating the economy from the effects of commodity price volatility,” he added.

The principle of revenue management, Mr. Boakye said, will protect macroeconomic stability, ensure fairness in the distribution of mineral wealth benefits, and sustain the fiscal contributions of mining after depletion.

Mr. Alhassan Iddrisu, Head of Programmes-ACEP, said legal frameworks of resource governance ensure that government’s action is well-coordinated in an efficient and effective manner for the benefit of all.

He stated that countries with mineral resources, when used well, will create greater prosperity for current and future generations; while when used poorly will can cause economic instability.

Cashew potential to rival cocoa

Mr. Kennedy Osei Nyarko, Deputy-Minister for Food and Agriculture (MoFA) in charge of Perennial Crops, has said government recognises the importance of cashew and the potential it holds for rivalling cocoa - hence launch of the 10-year Cashew Development Plan to expand production and promote competitiveness of the cashew value chain.

“Cashew is currently Ghana’s leading non-traditional agricultural export crop, raking in about US$197million revenue in 2016. This constituted about 53 percent of the total revenues of US$371million received from the non-traditional agricultural export sub-sector,” he stated.

He said this at a five-day Master Training Programme (MTP) for cashew sector players with 77 cashew experts from 12 African countries - including Ghana, Nigeria, Burkina Faso, Cote d’Ivoire, Mozambique, Togo, Benin and Sierra Leone. The programme was designed to develop cashew experts endowed with knowledge and skill in the cashew value chain in order to become change-makers.

The programme, which has trained over 250 experts in the previous edition, was organised by ComCashew in partnership with the ACA and with support from the Ministry of Food and Agriculture (MoFA) and Cocoa Research Institute Ghana.

Mr. Nyarko explained that the Cashew sector will have a Development Board to provide direction for implementation of the plan.

Government, he said, is also in a tripartite cooperation with Germany and Brazil aimed at complementing technical contributions and applying the knowledge, skills and experiences of the three countries to their cashew industries.

There is a need for strong commitment by governments through policy and other interventions to optimise benefits of the crop, and knowledge-sharing to sustain momentum in the industry, he remarked.

Ms. Rita Weidinger, Executive Director of the Competitive Cashew Initiative (ComCashew) - formerly the African Cashew Initiative, said though Ghana has made strides in development of the cashew sector, the regulatory framework is not yet such that the processing sector can be competitive and needs to be addressed.

She explained that while there are 12 processing factories in Ghana, only three are currently functional.

She indicated that regulation should cover areas like licencing traders in cashew, with minimum standards in order to sanitise the market. It should also cover quality standards for the cashew, both raw and processed, as it will determine the product’s price on both the domestic and international markets.

“Another area of regulation would be to certify improved planting materials. Farmers should have quality planting materials, and they should be certified.”

She stated, however, that the industry in Ghana is on the right track - with several interventions by the ministry and partners which will see the sector overtaking the cocoa sector as a major export commodity in some 20 years.

Interventions focusing on research and development of improved planting material, initiated by the Ministry of Agriculture and Cocoa Research Institute, she said, have led to Ghana becoming one of the highest producers of cashew in the sub-region - producing about 700 kilos per hectare, compared to between 300 and 500 kilos per hectare in the sub-region.

“If we continue with these strides, with the new commitment of government, then the sky is the limit; Ghana can be the centre of excellence for the cashew sector,” she said, adding that the process for the regulations is already underway by government and its partners.

Mr. Ernest Mintah, Managing Director of the African Cashew Alliance (ACA), indicated that increasing processing of cashew from the current less than 10 percent processed to about 25 percent will have a tremendous impact on poverty reduction, as it will generate over US$100million in household income for rural families in Africa .

“Without doubt, cashew has gradually become the ’crop of the moment’ in Africa. Africa is now the largest producer of raw cashew nuts, accounting for more than half of the world’s production.

“Processing is still a challenge that remains at less than 10%, but even at this level it has translated into substantial wealth and employment gains for millions of families in Africa.

“One can only imagine what the result will be if processing is further increased in Africa. It is estimated that a further increase of 25% in value-added cashew products would have a tremendous impact on poverty reduction, generating over US$100million in household income for rural families,” he said.

Two million grafted cashew seedlings

As part of implementing the 10-year Cashew Development Plan (2017-2027), the Ghana Export Promotion Authority (GEPA) in collaboration with the Cashew Industry Association of Ghana (CIAG), is expected to produce over two million grafted cashew seedlings annually for onward distribution to farmers in all cashew-growing communities across the country to boost production of the crop.

The plan is for the country to increase production of raw cashew nuts from 70,000 metric tonnes to 300,000mt; increase processing capacity from 65,000mt to 2000,000mt; as well as promote marketing of cashew by-products, among other things.

To this end, GEPA has given GH¢1.6million to CIAG for development of the improved cashew seedlings and the pilot phase of a mass spraying exercise for some 30,000 hectares of cashew plantation.

The CIAG, in turn, contracted the private cashew nursery operators to assist in the development of grafted seedlings.

GRA creates mining list to enhance revenue collection

Ghana Revenue Authority (GRA) is to create a mining list that will be reviewed annually to help in revenue collection and sustainability of businesses in the country.

Commissioner- General of GRA, Mr. Emmanuel Kofi Nti, said: “In the past, some items which have been included on the mining list had dual usages; items change in their nature and form and an annual review will create certainty in the minds of the mining industry and the GRA as an institution.

“We want to be as certain as possible, so an item which may be inclusive in our mining list and if it delays for about three to four years and its use has become a dual, then we may be looking at it as exclusive - but that may be deceptive.”

Mr. Nti explained that “the issue of having a regular review will bring us closer to the reality on usage of the items.

“Review will help in revenue collection, in that things which have changed and become dual may no longer be admitted; so that when we are given exclusive entitlement to the benefit we are very certain that the idea of dual application does not come up,” he explained.

“We want to make sure that a wholly exclusive and intensive use in the mining industry becomes a qualification for allowing an item onto the mining list,” he added.

The Commissioner General was speaking in reaction to an issue raised by Madam Maureen Balibi-Boye, Tax Manager at American Mining Services (AMS), “on duty issues, exemptions, import through the borders as well as associated high cost of doing business, which affect profit tax among others” when he visited the company with some officials from the GRA and Ghana Chamber of Mines at Tarkwa in the Western Region.

Still on the review of the mining list, the GRA boss said: “We want a situation whereby the pricing mechanism is complied with by the industry and is as real as possible; and that the industry knows it is up to date with the pricing mechanism on the international market.

“In this work that we are doing there are related party transactions, and so there are issues where items might have been sold and are also being sold at arm’s-length,” he said.

“As we deal with them and they know we are closely monitoring the environment there will be greater transparency, and when they report they can understand that there is no need for us to be arguing on some issues,” he added.

“We are here to acquaint ourselves with operations of the mine and its service companies; we want to move to best practices, and as revenue collectors we are here to see the reality on the ground. The processing is very revealing and it will bring us closer to them,” he concluded.

Chief Executive Officer of the Ghana Chamber of Mines, Mr. Suleman Koney, noted that the mining industry is largely misunderstood; and to create that understanding with the key stakeholders “we thought it wise to come with our top hierarchy, the Commissioner General and his team, to get a first-hand opinion of processes and facets of the mining industry.

“We believe through such engagement we will deepen the mutual trust and partnership. Coming to the source of the income which the country relies on largely is important,” he said.

Mining, he pointed out, is not about digging a hole in the ground but how to catalyse for development. “Until we build mutual trust between ourselves and the key stakeholders, particularly GRA, the mutual trust required to create that conducive environment for the industry to grow will not be there”.

He said: “It is my expectation that this engagement will continue and be deepened”.

The team visited the Ghana Manganese Company, Gold Fields Ghana Limited and Karl Tire as well as AMS.

About the mining list

The Minerals and Mining Act (2006), Act 703, does provide for the exemption of selected items from Customs duty to mining companies which is implemented through the Mining List.

All items on the Mining List attract a concessionary levy of 5% except plant, machinery and equipment for which no customs duty is paid. This provision is not peculiar to the mining industry. In fact, companies registered under the Free Zone in Ghana enjoy 100% duty exemption on all imports.

This concession is in recognition of the capital-intensive nature of mining investment. Applying the Customs duty of about 20% on such inputs will adversely affect the cash flow of the companies.

Although businesses generally pay Customs duty on their imports, this import is tax deductible. Exempting mining companies from Customs duty is therefore only a concession for managing their cash flows, and to allow the mining investment be realised and thereby generate socio-economic benefits from the country.

Where are the 20,000 jobs created?

Analysts have raised questions over the purported 20,000 jobs created by the Ministry of Business Development over the past 14 months.

Available information to the B&FT shows that about 2,000 businesses have been trained in the Northern Ashanti, Brong Ahafo, Northern, Upper East and Upper West Regions through the National Entrepreneurship and Innovation Plan (NEIP), the lead government agency.

Minister for Business Development, Mohammed Awal, in an interview with an Accra-based radio station categorically stated that 20,000 jobs have been created under his ministry in the past year, and that 7,000 businesses have been trained through the National Entrepreneurship and Innovation Plan (NEIP) Business plan competition.

On Monday 23^rd April 2018, the CEO of NEIP, Mr. John Kumah, in an interview with Accra-based Citi FM sought to rationalise that the 20,000 jobs stated by the Minister were based on the assumption that of the 7,000 businesses purported to have been trained, each will averagely employ three persons. 

“Job creation is a systematic and thought-through series of interventions which culminate in building viable and sustainable businesses which can then open their doors to recruit. So, for the Ministry of Business Development to assert that 20,000 jobs have been created because of a single training is very misleading,” a prominent entrepreneur who wanted to remain anonymous said.

He added that: “In what appears to be continuous mis-steps and short-sightedness by government, laudable projects like the NEIP - if existing challenges are not addressed - may end up like the Youth Enterprise Support (YES) programme under the former government".

Under YES, the then-government provided a seed fund of GH¢10million for entrepreneurship development - but the programme became a disgrace to government as it used functionaries to implement the programme instead of credible private sector players. In the end, businesses which took soft loans from YES have not refunded and hardly any success stories can be told from the initiative.

So, it came as a relief to the business community and development partners that this time around the NEIP project was going to be private sector-led. True to government’s words, the Minister of Finance in his annual 2018 budget recognised the fact that a tender process had taken place with 13 companies and one had emerged successful.

John Kumah, during the radio interview, however asserted that the British Council had been partnered to provide a standardised training and use business hubs across the country to provide training for all 7,000 businesses which applied for the business plan competition, although the process had started somewhere late last year and stalled for lack of funding.

A series of documents sighted by BF&T show that new companies and organisations, including the British Council and business hubs, are in the process of signing a series of Memoranda of Understanding between them and NEIP for the same work to be done - though they did not go through the initial tender from our checks at the Ministry of Business Development. This raises issues of sole-sourcing.

GRA issues 1million TINs as it continues to deepen awareness

The Ghana Revenue Authority (GRA) says it has so far issued 1,090,338 Taxpayer Identification Numbers (TIN).  

Although it said the figure still falls way below expectation, the GRA urged persons who are yet to register for the Taxpayer Identification Number (TIN) to take steps to do so, as it begins enforcement of the law.

 “The Authority will continue to receive, process and register new applications, and as such urges all who have not registered to quickly visit any of our offices and get registered,” said Emmanuel Kofi Nti, Commissioner General Ghana Revenue Authority.

“Consequently, GRA expects the institutions to demand the TIN of their clients before transacting business with them,” he added.

Mr. Nti, who spoke at a media briefing on TIN in Accra, explained that the law seeks to broaden the tax net to capture all potential taxpayers and afford the revenue administration the ability to monitor all transactions entered into by taxpayers.

Effective April 1, 2018, a person without a TIN - an 11-digit unique number given to identify taxpayers and enable GRA to credit them whenever they pay their taxes - cannot open a bank account, file a case in court, acquire a passport or obtain a driver’s licence.

Additionally, persons without the number will not be able to register a vehicle, clear goods in commercial quantities at the ports, or register any title to land or any land-related document.

Other services for which the TIN is needed include registration of a company at the Registrar General’s Department or any District Assembly office; receiving payment from the Controller and Accountant General or a District Assembly in respect of a contract for the supply of any goods or provisions of any services.

He said in accordance with the Revenue Administration Act (RAA) a person shall show the TIN in any claim, declaration, notice, return, statement or other document used for the purpose of a tax law.

According to the Revenue Administration Act, the law applies to state institutions such as the Ghana Revenue Authority, the Controller and Accountant General’s Department and the Lands Commission, among others.

“It therefore means that one cannot transact business with these institutions if one does not have the TIN,” Mr. Nti further said, adding that the GRA has already held a series of meetings with the listed entities.