Upstream petroleum oversight: GRA affirms SML suspension but…

On May 14, the Ghana Revenue Authority (GRA) denied claims about Strategic Mobilisation Ghana Ltd. (SML). Reports suggested SML was authorized to expand its revenue assurance role. This expansion would include the upstream petroleum and solid minerals sectors.

The GRA issued an unsigned statement from its Communication and Public Affairs Department. They confirmed that SML’s services in these sectors remain suspended. This suspension is pending further review, which was announced in April 2024.

The GRA emphasized that it has not instructed SML to resume operations under the 2023 contract. Interestingly, SML officials denied making any claims about expanding their operations.

Myjoyonline.com found a letter from former President Nana Addo Dankwa Akufo-Addo dated December 4, 2024. In this letter, he expressed no objection to implementing SML's revenue assurance system for upstream and minerals sectors. The letter was signed by Kow Abaka Essuman and addressed to the GRA Commissioner-General.

Despite this presidential approval, the GRA clarified that no directive has been given to SML to start operations in those sectors. The Authority reiterated that all activities related to SML are still suspended and under review.

SML's role in Ghana's revenue assurance framework has sparked public debate. Concerns have been raised about transparency and the scope of its contracts with the state.

At a recent forum on tax revenue leakages in Ghana, Dr. Eric Boachie Yiadom presented findings from an independent study. He highlighted SML as a case study for technological solutions in revenue assurance. He called for stronger national institutions and technology adoption to address tax revenue leakages.

Dr. Yiadom stated, “We cannot build a nation based on trust.” He argued that strong nations rely on robust systems for compliance, regardless of individual trustworthiness.

He cited data showing discrepancies between reported petroleum lifting volumes and actual taxable volumes reached 3.2 billion liters annually before mid-2020. After SML's engagement, this discrepancy dropped over 91% to 260 million liters per year.

For more details, read the full report here:
https://www.myjoyonline.com/strong-institutions-not-strong-men-upsa-forum-urges-tech-driven-reforms-to-curb-tax-revenue-leakages/