A Senior Lecturer at the University of Ghana Business School (UGBS), Dr Lord Mensah, has questioned the decision of Ghanaian authorities to register Agyapa Royalties Limited in Jersey, UK.
He said by registering it in that part of the world, the investment has been moved far away from the shareholders in Ghana.
The government through a Deputy Minister of Finance, Charles Adu Boahen, said incorporating Agyapa in Jersey makes the deal tax-efficient and will also provide shareholders the best out of the transaction.
“We used it because it was a tax-efficient avenue to use. If we had decided to use transfer the royalties to Agyapa that was domiciled in Ghana, We would have ended up in a situation where we would be paying tax twice.”
He further explained that: “The royalty flows itself is in a tax. It would have come to Agyapa as a company incorporated in Ghana as a revenue stream. It will then come out as an income, profit after tax.
“So that profit will be taxed before you get your net income which will then come out.”
“By routing it through Jersey, the 100% comes in and goes out as the same hundred less whatever operating expenses there, there are no taxes. Which means that the shareholders are getting the full benefits of that 100% of royalties.
“It also means that the valuation of the companies will be 25% higher than if this was domiciled in a tax jurisdiction,” Mr Adu Boahen added.
But speaking on TV3‘s The Key Points hosted by Abena Tabi Saturday, September 5, Dr Lord Mensah said: “We went to register Agyapa there because we want to avoid taxes. I see it to be an excuse. Moreso, for a first time that such a package is going to be issued on behalf of Ghanaians, why do you take it that far away? And more so an Island where it is difficult to even get information.
“As we started this discussion everything has been centered on transparency, openness, making sure that the shareholders know what they are going for. The shareholders are me and you and Ghanaians and the public in general because the minerals belong to us and let us know exactly what is happening, you go and put it somewhere that we cannot have access to.”
He added: “Agyapa itself what is its track record in managing funds in this nature? Have they managed multi-billion funds before ? If all these are questions that cannot be answered then I am afraid to say that taking it to Jersey was not necessary because you are moving it far away from the investor , far away from the shareholders . Most Ghanaians don’t understand the complexity of the discussion we are having.
“How many Ghanaians even know where Jersey is? So if you are truly representing Ghanaians I think you would have registered it at an environment where Ghanaians will be comfortable.”
By Laud Nartey|3news.com|Ghana
