Businesses urged to comply with beneficial ownership initiative
The Director-General of the Internal Audit Agency at the Presidency, Dr Eric Oduro Osae, has urged businesses, especially those in the extractive sector, to fully comply with the Beneficial Ownership Transparency (BOT) initiative that Ghana has signed on to.
He said the existence of a quality and timely beneficial ownership (BO) data was important to improve natural resources governance in the country.
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The government in September 2021, committed to the implementation and acceleration of BO disclosure and data use by joining the Opening Extractives (OE) programme, which is a global initiative aimed at transforming the availability and use of BO data for effective governance in the extractive sector.
Speaking in an interview with the Graphic Business, Dr Osae said BOT, which helped to ensure transparency over who ultimately owned and controlled companies, was an important intervention to reduce corruption by preventing companies from hiding revenues that could be taxed.
He said it would also help in preventing the government from under declaring and also ensure that the right royalties were paid and used for the intended purposes.
“We have mineral royalties and stool land revenues paid to holders of stool lands. It will also introduce some transparency and openness in the use of those revenues by traditional authorities and the chieftaincy institution,” he said during the interview on April 8, 2022.
Benefits
Dr Osae noted that the country could benefit immensely because it was a way to introduce some level of transparency in the ownership of institutions and shares in various organisations.
In the extractive industry especially, he said it would help to know those behind certain businesses and to also track resources and the revenues that went to them.
“Once we are able to do that, it will help us reduce the corrupt act of certain people whether public or private. Most especially, it will help us to ascertain those who have declared their income for the purpose of taxation.
“Aside that, it will also help us to improve revenue mobilisation because the organisations in the extractive sectors are compelled to declare or openly publish whatever goes to owners of the organisations and whatever goes to the government,” he said.
Raking in revenue
Also speaking in a separate interview, an economist and governance expert, Samuel Osei Bekoe, noted that over the years, the target had been legal owners of companies.
However, due to Ghana’s commitment to transparency and accountability under the Extractives Industries Transparency Initiative (EITI) and the European Union charter, ownership disclosure is required.
“BO is intended to unveil the true persons who have interest in and benefit from a company. It will help investors and stakeholders to know who they do business with to prevent tax evasion and transfer pricing situations which has dire consequences on a country’s development agenda as it deprives state of the needed revenue,” he said.
For his part, the Technical Manager at the Public Interest and Accountability Committee (PIAC), Mark Agyemang, said the BOT was long overdue because through the EITI, the intent of the whole process was to get real owners of businesses to prevent fronting.
“It is perceived that the real owners behind businesses are politically exposed persons who influence things and don’t want to be known.
“It actually exposes Ghana to broader transparency and accountability but the caveat is that, if we are able to implement it well, we will get to know the true owners behind companies not just board of directors.
He added that relevant institutions such as the Registrar General’s Department and the Ghana Revenue Authority (GRA) should be able to work well to enhance broader transparency and accountability.