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16 July 2016

Ghana Gas tax waiver too high – Minority

parliamentParliament has approved a US$150 million tax waiver for equipment being purchased for the Western Corridor Gas Infrastructure Project.

The project is expected to lay out a network of gas pipelines for the commercial operations of the Ghana National Gas company on the Western Corridor.

But contributing to deliberations on the tax waiver, Second Deputy Minority Chief Whip, Ignatius Baffour Awuah, criticized the total sum of the waiver explaining that it was too huge.

“The total sum of US$152 million is 37.4 percent of the CIF value of $US430 million. Mr. Speaker, to me this on the higher side because, many a times we do grant some of these tax waivers without looking at the implications of these things that we do. Left to me alone, this waiver, in money terms, can be, perhaps, government of Ghana’s share in the project itself.”

“If they were to pay this, it would have increased the cost of the project.
By not paying this, the cost of the project has been understated,” he added.

Agreement was not laid before parliament for approval Mr. Awuah also expressed concern with the fact that, the original agreement between Ghana Gas and Chinese contractors, SINOPEC, was not approved by parliament.

He recalled that the Minority Spokesperson on Finance, Dr. Anthony Osei Akoto, had demanded that the agreement be brought to the house for consideration by the Energy Committee, but “for almost two years since he made that call, that particular contract has not been brought to the floor of this particular House.”

“But today, we are being called upon to approve a waiver which is in connection with this same contract which this house has not approved,” Mr. Awuah added.

Agreement would have been breached if… The Chairman of Parliament’s Finance Committee, James Kludze Avedzi, however clarified that failure to grant the tax waiver on the project would have amounted to a breach of the agreement between Ghana Gas and SINOPEC for the said project.

“The project has already been executed and the granting of the waiver was a condition precedent and obligation under the contract, failure of which would constitute a breach on the part of government,” he explained.

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