The recent announcement by the Finance Ministers of the G7 countries pushing for a global corporate minimum tax of 15 percent has received the tacit endorsement of Ghana’s Finance Minister, Ken Ofori-Atta.
The Group of Seven said it would back a minimum global corporation tax rate of at least 15 percent, and put in place measures to ensure taxes are paid in the countries where businesses operate.
This would require companies from the G7 countries to pay at least a 15 percent rate in each country they operate in.
The move aims to get multinationals — particularly tech giants — to pay more into government coffers hit hard by the pandemic. The provision is meant to address European leaders’ concerns that they cannot sufficiently tax tech giants like Facebook and Google, because while those companies make tons of money in Europe they are based in the US and pay taxes there.
Africa and Asia have raised similar concerns.
Mr. Ofori-Atta believes the move will further help to aggressively fight Illicit Financial Flows (IFFs) from developing nations as well. “The 15 percent minimum will bring in quite a bit of resources,” he added.
He added that a recent survey conducted by his office on some players in the nation’s extractive sector revealed that taxes they pay to government are devaluated through legal means.
Multinational companies over the years have been taking advantage of existing tax rules by shuffling money between jurisdictions with super-low rates. In fact, the IMF estimates that 40 percent of all foreign direct investment is “phantom” in nature – meaning it is money that passes through empty corporate shells, often for the purposes of lowering a company’s tax bill.
German Finance Minister Olaf Scholz described the deal as “historic” and very good news for tax justice and solidarity, and bad news for tax havens around the world.
The US-led proposal focuses on creating a global minimum corporate tax rate as well as special rules to change how much tax companies pay and where it is paid.
The global minimum tax will be levied only on the world’s 100 largest and most profitable companies.
Chief Executive of the Tax Justice Network, Alex Cobham, said the figure should have been “at least 25%”. A spokesperson for the online retail giant Amazon said the tax plan is “a welcome step forward”.
Editorial: Absence of Tree Crops Authority hurting cashew industry
The delay in operationalisation of the much-awaited Tree Crops Development Authority (TCDA) remains a worry for cashew processors.
According to the processors, further delay in making the Authority functional will among others bundle out the few surviving cashew processing companies in the country, especially the small-scale enterprises.
CEO of Gensap Food Processing Company in Sunyani, George Nkrumah Sarpong, lamented that their obsolete equipment can no more be relied on to meet the increasing demand.
Ten months after President Nana Addo Dankwa Akufo-Addo inaugurated the TCDA in Kumasi to serve as a regulatory body for six crops – cashew, shea, mango, coconut, rubber and oil palm – in September 2020 the Authority is yet to be fully operational.
Director of Crop Services at the Ministry of Food and Agriculture (MoFA), Seth Osei Akoto, has agreed that the new institution is battling with some operational hitches, but says efforts are underway to get the TCDA to hit the ground running as soon as possible.
Banks and loan lenders are demanding guarantors from the processors, that is why they are clamouring for government intervention – and the TCDA is expected to play a pivotal role in this regard.
A lack of investment has forced processors to abandon a product that can be turned into useful products like industrial fuel, lubricants, paint, and insecticides or fungicides. It is important to note that cashew shell comprises to 70-75% of the raw cashew nut.
Through the Tree Crop Development Fund, the Authority is tasked to identify and develop a sustainable source of funding for the tree crop industry.
The TCDA has therefore been tasked to provide technical advice to actors in the tree crops value chain and improve trading of the tree crops, while also coordinating and facilitating to build the capacity of farmers, processors, traders and exporters.
There is a need for the right regulatory structures and policies to be put in place to empower local producers, processors and other local actors in the cashew value chain.