The Government of Ghana has emerged victorious in a tax arbitration case against Tullow Ghana Limited, with the International Chamber of Commerce's arbitral tribunal dismissing all claims brought by the company and upholding the Ghana Revenue Authority's tax assessment of $393,091,993.70. This significant ruling brings closure to a long-standing dispute between the two parties. The arbitration was conducted under the Rules of Arbitration of the International Chamber of Commerce.
According to the Minister for Finance, Dr Cassiel Ato Forson, the tribunal found that the assessment did not breach the Petroleum Agreements, the penalty was properly applied, the assessment was not time-barred, and the GRA's enforcement action was lawful. The Minister expressed satisfaction with the outcome, stating that it vindicates Ghana's position that every company operating in the country is subject to its laws.
Dr Ato Forson commended the Office of the Attorney-General, the Ghana Revenue Authority, and Ghana's external legal counsel, Foley Hoag LLP, for their role in defending the interests of the Republic. He emphasized that the government will work to implement the award in accordance with Ghanaian law while ensuring that Tullow's capacity to continue operating and investing in the Jubilee and TEN fields is maintained.
The tax dispute centered on the taxation of business interruption insurance proceeds received by Tullow Ghana Limited. The GRA had assessed that the company owed $393,091,993.70 in taxes, which Tullow had contested. The arbitral tribunal's ruling in favour of Ghana is seen as a significant victory for the country's revenue authority and a demonstration of its commitment to enforcing tax laws.
The outcome of the arbitration is expected to have a positive impact on Ghana's economy, as it secures significant tax revenues for the government. At the same time, it ensures that Tullow can continue to operate and invest in the country's oil and gas sector, particularly in the Jubilee and TEN fields.
The Minister for Finance emphasized that the government is committed to creating a fair and transparent tax environment for all companies operating in Ghana. He noted that the ruling demonstrates the country's commitment to upholding the rule of law and enforcing its tax laws in a fair and equitable manner.
The International Chamber of Commerce's arbitral tribunal's ruling is a significant milestone in the tax dispute between Ghana and Tullow Ghana Limited. The government is expected to take steps to implement the award and ensure that Tullow complies with its tax obligations in accordance with Ghanaian law.
Key points
- The Ghana Revenue Authority's tax assessment of $393,091,993.70 has been upheld by the International Chamber of Commerce's arbitral tribunal.
- The tribunal found that the assessment did not breach the Petroleum Agreements and that the GRA's enforcement action was lawful.
- The government will work to implement the award in accordance with Ghanaian law while maintaining Tullow's capacity to continue operating and investing in the Jubilee and TEN fields.
