Partners of accounting firm, PwC, have called on operators in the oil and gas industry to come together and articulate their views on issues and challenges affecting their operations in the burgeoning industry.
PwC Oil and Gas Tax Partner, Mr Darcy White, said in view of that there had to be a continuous dialogue between the government and oil contractors and operators and the industry should have a unified front in a form of a business chamber to deepen the dialogue necessary for the success of Ghana’s oil and gas productivity.
“There should be deepened dialogue between the government and the businesses in the sector because the country can achieve greater results with this approach, rather than through confrontation. The industry should adopt a chamber approach to articulate their views and deepen the dialogue”, Mr White suggested at a Roundtable conference in Accra on Oil and Gas.
The roundtable, on the theme “Changing tides in Ghana??? was part of the leadership activities of the accounting firm and was attended by representatives across the oil and gas industry and agencies that relate to it.
Mr White also cautioned that the implementation of Local Content and Local Participation in Petroleum Activities policy could have negative implications for investments in the oil and gas industry.
He said the five per cent quota of local participation in petroleum activities would be difficult to implement, citing challenges in Ghanaians sourcing for funding for the equity stake.
According to Mr White, in spite of having so many laws governing the oil and gas industry, some of them had clauses and provisions that were either not friendly to business or difficult to implement, and therefore had implications for attracting investments into the oil and gas sector.
For example, the tax expert said, the application of the Value Added Tax (VAT) did not have a special dispensation for companies operating in the sector, which meant that the operators, service providers and the like would be required to pay input VAT, before they applied for refunds.
“This system is cumbersome and looking at what already pertains n the general business environment with VAT refunds, I foresee that businesses will suffer for locking up their monies as a result of input VAT”, Mr White pointed out.
Again, he pointed out that the Petroleum Exploration and Production Bill also had a provision for all loans taken by oil contractors to be approved by the Minister of Energy, and where such loans were not approved, the interests on them would be treated as non-deductible items.
The PwC tax partner said that provision could also mean higher costs and higher tax obligations for oil contractors, saying “this provision needs to be tackled well so it does not have any negative effects on investments opportunities in the oil and gas industry”.
The roundtable, however, converged on the need for a continuous dialogue between the government, regulators and the private sector to achieve greater results.
However, the forum brought out how some procedures within the public sector, such as applying for work permits took forever.
Some representatives from the Ghana Immigration Service at the roundtable urged companies that wanted working permits for their expatriate staff to apply way ahead of their arrival and not wait until the expert was in the country before they tabled the application.
The immigration officers also insisted that the work permit for expatriate staff would be rigidly enforced to ensure that only expertise that could not be sourced locally were allowed to work in the country.