Story: Moses Dotsey Aklorbortu, Takoradi
GHANA is said to be losing millions of dollars in tax revenue from expatriate workers employed by the oil companies, including Tullow Oil and other partners in the Jubilee Oil Fields.
Some mining companies are also said to have engaged such expatriates, who do not pay tax by virtue of the immigration particulars they bear and because the offending employer companies do not use local recruiting companies and agents.
The Daily Graphic has gathered that the expatriates fly into the country with B2-tourist and B1-business visas, which do not permit them to work in the country.
The said workers then fly offshore and out of Ghana after 28 days without paying any taxes from their earnings to the state.
The Ghana Immigration Service (GIS) confirmed to the Daily Graphic that some of the expatriate staff working on the oil rigs did not have the requisite permits but added that as of now, no framework had been developed to deal with the situation.
The ideal situation was to ensure that these expatriates applied for work and residential permits and their salaries paid through Ghanaian banks, a GIS official told the Daily Graphic.
The Daily Graphic has sighted records from local recruitment agents that provide services to the partners on the oil rigs that show deductions of up to 25 per cent income tax to the state.
The records do not, however, capture the details of expatriate staff, who are said to form the majority of people working on the rigs because they are paid directly by the Jubilee Oil Field partners.
This means that Ghana could have raked in millions of dollars in income tax revenues if these expatriates were engaged by local agents and their salaries paid through them locally to attract the appropriate tax to cushion the economy.
Some of the industry practitioners have laid part of the blame on local institutions such as GIS for the lapses.
According to the GIS, the expatriates were without the appropriate permits but the service was working hard to ensure that they secured the requisite permits before working.
The oil companies are said to have capitalised on that, and expatriates who come to work offshore in Ghana are made to fly back to their countries after every 28 days with dollar salaries paid straight into their accounts.
The Head of Public Relations of GIS, Mr Francis Palm-Beti, told the Daily Graphic that the GIS was currently working in collaboration with the Ghana National Petroleum Corporation (GNPC) and the Ministry of Energy to work out which permits to issue.
He explained that people with the B2-tourist visa were not supposed to work at all and those with B1-business visa were in the category of people who could come to the country to help install and train people on new machinery or equipment purchased abroad.
Under Immigration Regulation on requirements for assignments ranging between 30 days and a year, it is stated that frequent visitors to Ghana to engage in short-term assignments, such as consultancies, provision of technical services, maintenance, repairs, auditing and internships/attachments would not require work permits.
However, such persons are expected to have applied for and obtained a Business Visa (B-1 Category) prior to arrival. Such assignments shall not exceed three months.
In addition, the regulations state that: “For an assignment of up to six (6) months a requisite dispensation may be granted by the Director of Immigration on application. For assignments ranging from six months to one year, a work permit is required”. These workers are often referred to as “Rotators”.
Mr Palm-Beti expressed the hope that very soon, the GIS and the other stakeholders would come up with the appropriate permit for the expatriates, particularly the rotators.
An expatriate industry source, however, suggested that even with the absence of such a permit, the economy of Ghana could make some temporary gains if the payment of salaries to the expatriate staff were at least passed through the local banking system.
“I am shocked to see that the laws of Ghana are being relaxed to favour other people to the detriment of your economy; the country is losing billions in dollars,” he said.
But officials of Tullow Oil told the Daily Graphic that its expatriate staff paid taxes, irrespective of the recruiting agency.
“Every local and expatriate employee of Tullow Ghana Limited — whether permanent, contract or rotator — pays taxes as stipulated by the laws of Ghana.
“Tullow Ghana Limited withholds the applicable percentage of tax and pays to the government,” the Communications Manager of Tullow, Mr Gayheart Edem Mensah, said.
Mr Mensah said all Tullow employees residing and working in the country had the requisite permits, with none coming into the country with a tourist visa.
“We ensure that everyone who comes here to work for us comes with at least a Business Visa, as stipulated in the Ghana Immigration Regulations,” the Tullow communications manager said.
On the issue of the rotators, Mr Mensah said the practice was very common in the oil industry right up from Angola to Equatorial Guinea and Brazil, among others, and that the system was rather critical to oil exploration and production, and particularly in virgin oil countries like Ghana.
He confirmed that some staff of Tullow, who he referred to as ‘rotators’, came into the country, worked and left after 28 days; they returned in about a month or two, work for another 28 days and return.
“Strictly, therefore, they are not residents, and that is why they come in with Business Visas, which per the regulation quoted above, permits them to do some work of limited duration,” Mr Mensah explained.
He said managing immigration issues relating to the Rotator was a grey area and came under the knotty challenges that the company, the authorities and other stakeholders were trying to resolve.
He said the existing government policies for the extractive industry appeared inadequate for the oil industry due to certain peculiarities.
According to Mr Mensah, Tullow has, nevertheless, submitted the required documentation on the matter to the appropriate institutions for their advice and action.
“It needs to be pointed out though that the accelerated development of the Jubilee Field would not have been possible without the skills and experience of the Rotators, we have had a lot of meetings and correspondence on this issue, and we are hopeful it will be resolved soon,” he stated.
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