Ghana has secured a favourable ruling in its tax arbitration with Tullow Ghana Limited after an international tribunal dismissed the company’s claims and upheld the Ghana Revenue Authority’s US$393.09 million tax assessment in full.
The dispute concerned the taxation of business interruption insurance proceeds received by Tullow.
The tribunal, constituted under the Rules of Arbitration of the International Chamber of Commerce, found that the assessment did not breach the Petroleum Agreements.
It also ruled that the penalty was properly applied, the assessment was not time-barred and the GRA’s enforcement action was lawful.
Finance Minister, Dr. Cassiel Ato Forson in a statement said the ruling affirmed Ghana’s position that every company operating in the country, regardless of its size, is subject to Ghanaian law.
He acknowledged the work of the Office of the Attorney-General, the Ghana Revenue Authority and Ghana’s external legal counsel, Foley Hoag LLP, in defending the interests of the Republic.
The Government said it would continue discussions with Tullow to resolve the outstanding tax matters amicably.
The discussions cover the matter determined by the tribunal and separate proceedings concerning the disallowance of loan interest.
Dr Forson described Tullow as a vital partner and Ghana’s largest petroleum producer, whose operations in the Jubilee and TEN fields support the country’s energy security, domestic gas supply and thousands of Ghanaian livelihoods.
He said it was in the national interest for the relationship between Ghana and Tullow to endure.
The Government will therefore work closely with the company to implement the award in accordance with Ghanaian law, while safeguarding the continuity of operations and future investment in the Jubilee and TEN fields.
Ghana’s laws empower the GRA to determine the time and manner in which assessed liabilities are settled.
Dr Forson said the Government would ensure that revenues due to the Ghanaian people are secured while preserving Tullow’s ability to continue operating and investing in Ghana as a going concern.
