Legal and fiscal framework: Ghana

Ghana’s 2010-11 EITI Oil and Gas Report identified gaps in the existing legal and fiscal regime, leading to lack of payments of capital gains tax by oil companies.

In 2011, one of the international oil companies operating in Ghana, Tullow Oil Plc, acquired EO Group Limited, one of the partners in the Jubilee oil field. The EITI Report documented that there was no capital gains tax paid in the transaction, although the Ghana Revenue Authority had issued a ruling that the transaction is liable to such a tax. According to the Petroleum Revenue Management Act, the sale of exploration, development and production rights is subject to capital gains tax and should be collected by a the petroleum holding fund.

The 2013 EITI Report recommended to follow up on the EO Group acquisition, including harmonising the relevant legislations.

To follow up on this recommendation, the Government of Ghana and the Ghana Revenue Authority have taken several actions to ensure that the legal framework covers such capital gains tax payments from the oil sector in the future, including:

  • Passing the Act 871 (Internal Revenue Amendment) in 2013, which amended the provisions of the Internal Revenue Act to cover such capital gains tax payments from the oil sector in the future.
  • Ensuring that capital gains tax was paid in other acquisitions, such as Sabre Oil’s sale of its interest in the Jubilee Fields to Petro SA.
  • Continuing to monitor, through EITI reporting, whether these types of sales are made in accordance with the legal framework. The 2012-13 EITI Oil and Gas Report noted the cases in which capital gains tax was applicable but not paid.