Dedicate resources to enforce transfer pricing regulation
The Associate Director in charge of Tax Services at Ernst and Young (EY), Mr Patrick Oparah, has called for a corps of dedicated personnel to enforce the transfer pricing regulations in the country.
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Transfer Pricing Regulations, 2012 (L.I 2188) requires taxpayers who have undertaken connected-party transactions to specifically comply with the principle of pricing.
It is also to ensure that affected persons, including companies, file transfer pricing income tax returns.
Transfer pricing occurs when multinationals or companies prefer to source inputs at exorbitant prices from offshore sister/subsidiary companies in an attempt to increase their cost of sales and avoid paying local corporate taxes.
Mr Oparah said although legislation had been drafted, there was the need for a dedicated human resource equipped with the necessary skills to enforce it.
He was answering a question on the challenges on transfer pricing in Ghana at a workshop in Accra.
The workshop organised by EY was to explore the transfer pricing issues that confronted a multinational group that operated in a number of jurisdictions around the globe.
It comprised a rolling case study, which considered the transfer pricing issues relating to distribution, manufacturing, financing and management operations of the multinational group.
The workshop brought together Chief Financial Officers, Tax Managers and Risk Managers from both local and international companies.
On whether Ghana had a good pricing regulation, Mr Oparah, said the country had the benefit of looking at how the regulations were implemented elsewhere in the world in order to learn from those experiences.
“The regulation has been drafted based on best practices elsewhere and so I think it puts the country in a strong position to enforce transfer pricing regulations compared to the rest of the word,” he said.
He, therefore, called for a more committed effort to ensuring that the regulations were enforced and implemented for the benefit of the country.