Bank of Ghana Increases Sanctions for the issuance of Dud Cheques.
Under section 313(A) of the Criminal Offences Act, 1960 (Act 29) as amended, it is an offence punishable by a fine and/or imprisonment of up to five (5) years for any person to issue a dud cheque. Yet the Bank of Ghana has noted with great alarm the high issuance of dud cheques by some customers of banks and specialized deposit taking institutions (SDTI).
In 2005, the Central Bank introduced certain sanctions with the hope of curbing the practice. yet since then, people have continued to issue dud cheques, unperturbed. This has had grave consequences on the acceptance of cheques by many institutions. In light of this, Bank of Ghana has revised its sanctioning regime to discourage the malpractice.
Hence forth, persons who issue dud cheques would face a number of increased sanctions. These include a warning for first timers, surveillance for several years, among others. A person caught could even lose the right to own or issue any cheques at all for prolonged periods. And all these are in addition to the fine or jail time a person may face under the criminal law
Find the full Bank of Ghana Notice on the sanctions for the issuance of dud cheques here
Source: bog.gov.gh
How Can Laws Promoting Gender and Disability Rights Support Economic Development?
Introduction
Very often, persons living with various forms of disabilities are denied fundamental freedoms and basic socio-economic opportunities because of the traditional notion that their impairments render them unproductive and fruitless. Gender inequality is a social state whereby boys and girls are not treated as equals due to a distinction in their biological, psychological, or cultural make-up. Gender inequality with reference to persons living with disabilities (hereinafter referred to as PWDs) has been a global challenge especially in developing countries in spite of existing laws that seek to protect these persons deemed to be vulnerable and less privileged. This has adverse effects on the individuals themselves and increases their dependency on government which gradually impedes economic development because they do not work to fend for themselves or they are left in isolation due to social stigma. This paper, therefore, discusses the relationship existing between disability rights and economic development and suggests that effective legislation, when it comes to gender and disability can reduce dependency rate on governments, increase countries’ eligibility to foreign aid, ensure effective skill acquisition and training as well as increase government revenue to boost economic development.
Gender and Disability
The World Health Organization defines “gender” as “the socially constructed characteristics of women and men – such as the norms, roles and relationships that exist between them”. It is derived from the Latin word “genus” which means
race or kind. People who do not describe themselves as either masculine or feminine refer to themselves as non-binary, agender, genderqueer, or bigender. Gender may also be influenced by legal status, social interactions, public persona, personal experiences, and psychological setting. It is trite that people are sometimes “bullied” or discriminated against based on their gender statuses (with the feminine mostly being the victim).
“A disability is any condition of the body or mind (impairment) that makes it more difficult for a person with that condition to do certain activities (activity limitation) and interact with the world around them (participation restrictions)”. Persons with disabilities include those who have long-term physical, mental, intellectual or sensory
impairments which in interaction with various barriers may hinder their full and effective participation in society on an equal basis with others. In as much as gender inequality affects a lot of people in Africa and even worldwide, people living with disability face greater challenges with reference to their rights. This is simply because such persons suffer from impairment, activity limitation or participation restriction.
Source: Ms. Gloria Korankyewaa Nyarko
The Central Bank of Ghana Launches a Regulatory and Innovation Sandbox Prioritizing Blockchain Technology
The Central Bank of Ghana (BoG) has launched a regulatory and innovation sandbox pilot in line with its commitment to create an inclusive regulatory environment which promotes FinTech and innovation. The sandbox pilot will test innovative products, services, and business models under the regulator’s supervision.
The Bank of Ghana has specifically mentioned that the sandbox will give preference to products and services leveraging blockchain technology and remittances among others.
Below is the complete outline of categories that will be given preference in the sandbox pilot:
- Blockchain technology
- Remittance products
- Crowdfunding products and services
- e-KYC platforms
- RegTech (regulatory technology)
- SupTech (supervisory technology)
- Digital banking
- Products and services targeting women financial inclusion
- Innovative merchant payment solutions for MSMEs
The sandbox will be open and available to:
- Banks
- Specialized deposit-taking institutions and payment service
- providers such as dedicated electronic money issuers
- Unregulated entities and persons with innovations that meet requirements
Innovations eligible for the regulatory and innovation sandbox environment will have to satisfy any of the following broad categories:
- New digital business models not currently covered explicitly or implicitly under any regulation
- New and immature digital financial service technology
- Innovative digital financial services products that have the potential of addressing a persistent financial inclusion challenge
In 2020, the Central bank Of Ghana expressed its interest in developing a virtual currency for the economy. And the new sandbox could just be a step in that direction.
A recent report by the International Monetary Fund (IMF) also listed Ghana as one of the 40 countries globally legally allowed to issue a digital currency. Out of the list, only 5 African countries are listed with Ghana being among them with its E-Cedi initiative.
source: BitcoinKe
More on digital payment in Ghana:
Ghana Ready for First Sub-Saharan African LNG-to-Power Project
Ghana is set to open sub-Saharan Africa’s first liquefied natural gas-to-power project as it moves to position itself as a hub for the cleaner and cheaper fuel in the region.
LNG-to-power projects have been booming from Asian to Latin American in recent years as they allow nations to switch from dirtier fossil fuels to keep the lights on. And for sellers, integrated LNG-to-power provides a guaranteed outlet for the fuel.
Tema LNG Terminal Co. received the floating regasification unit from Jiangnan, China on Wednesday, paving the way for the supply of 1.7 million tons of natural gas per year for power generation sometime this quarter, Edmund Agyeman-Duah, project manager at the company, said.
The company, backed by Helios Investment Partners and Africa Infrastructure Investment Managers, began building the $350 million project about two years ago.
“Ghana can now start to service the rest of the region with fuel that is continuously growing in popularity because of the cost and the significant environmental benefits it provides,” Agyeman-Duah said.
LNG has Lower Emissions of Greenhouse gases
On a lifecycle basis, LNG emits around half the greenhouse gas emissions that coal does when burnt to generate electricity, and compared to a typical new coal plant, natural gas emits 50 to 60% less carbon dioxide when combusted in a new efficient natural gas power plant, according to the International Group of Liquefied Natural Gas Importers.
For a country with 30 million people, Ghana’s electricity consumption has grown alongside its economy, but it remains lower than the average per capita consumption of Sub-Saharan Africa and far below that of developed countries. For comparison, a U.S. resident consumes more than 30 times as much electricity as a Ghanaian resident, according to World Bank data.
A Cheaper and More Reliable Source of Power
“The completion of the Tema LNG facility will be significant for Ghana and the wider West African sub-region because it will mean less dependency on the West African Gas Pipeline – which hasn’t always proved reliable,” Kissy Agyeman-Togobo, a partner and analyst at Songhai Advisory Group Ltd., said by phone from Accra, Ghana’s capital.
Tema LNG Terminal is getting its gas under a long-term contract with Royal Dutch Shell Plc, said Agyeman-Duah, who isn’t related to the analyst. State-owned Ghana National Petroleum Corp. is currently the mandatory off-taker who will receive regasified LNG to fuel plants in the Tema power and industrial enclave.
“There’s quite a bit of suppressed demand in the system,” he said. “There are a lot of industrial customers who work off-grid because of the interruptions they suffer in power supply.”
The company has given Spain’s Reganosa Servicios SL the contract for the operation and maintenance of the unit and associated 6 kilometer (3.7 miles) gas pipeline, it said in a statement.
The project was financed with a combination of equity and debt from a consortium of international banks, according to Agyeman-Duah, and its processed LNG is expected to be 30%-35% cheaper than heavy fuel oil, he said.
Source: bloomberg
Africa’s $180 Billion Internet Economy Future
Africa’s internet economy is transforming development on the continent. It is fostering economic opportunities, creating jobs, and providing innovative solutions to complex challenges, like access to healthcare, education, and finance.
The e-Conomy Africa 2020 report, is a unique collaboration between IFC and Google. It sheds light on the great potential of the continent’s internet economy, the promising tech entrepreneurs driving innovation, and the growing tech talent across the continent.
Analysis in the report finds that Africa’s Internet economy has the potential to reach $180 billion by 2025. This accounts for 5.2% of the continent’s gross domestic product (GDP). By 2050, the projected potential contribution could reach $712 billion, 8.5% of the continent’s GDP.
Driving this growth is a combination of increased access to faster and better quality Internet connectivity, a rapidly expanding urban population, a growing tech talent pool, a vibrant startup ecosystem, and Africa’s commitment to creating the world’s largest single market under the African Continental Free Trade Area.
Source: e-Conomy Africa
Ghana Banking Code of Ethics and Business Conduct Launched
The Chartered Institute of Bankers, Ghana (CIB) in collaboration with the Bank of Ghana (BoG) and the Ghana Association of Bankers (GAB) has launched the Ghana Banking Code of Ethics and Business Conduct.
This comes as part of efforts to curb the number of fraud-related cases perpetuated by staff within the banking industry.
President of the Chartered Institute of Bankers, Patricia Sappor launching the Code of Ethics explained it is intended to guide all practitioners to maintain the best banking practices and strong commitment to sound ethical and professional standards in the banking industry.
“This will ensure that Chartered Bankers continue to play critical roles in the banking industry and distinguish themselves on account of the significant contributions they make to the profession of banking as it is the only qualification customized to the core practice of banking,” Patricia Sappor said.
“The Code reinforces provisions made under Sections 18 (2) (d), 24 (1) (a) and the Third Schedule of Act 991. Thus, ensuring that all Financial Institution employees conduct their duties fairly, honestly and with integrity so as to uphold the mutual trust and public confidence bestowed upon them.” Sappor added.
“The effective implementation of the Code will foster a high level of integrity, discipline and etiquette in the banks leading to improved confidence amongst customers and the general public,” the CIB Ghana President stated.
The Code was developed by the Chartered Institute of Bankers Ghana in collaboration with the Ghana Bankers Association and the Bank of Ghana.
It is in line with Section 3 (d) of the Chartered Institute of Bankers Ghana Act, 2019 (Act 991) which reinforces the Institute’s mandate of setting standards and ensuring the observance of ethical standards and professional conduct among members of the banking profession in the country.
The Chartered Institute of Bankers, Ghana promotes the study of banking and regulates the practice of the banking profession in the country.
Meanwhile, the Bank of Ghana has expressed worry over the rising incidence of fraud committed by banks’ staff.
In its 2019 Banking Industry Fraud Report, the Central Bank stated that while the overall number of fraud cases went up marginally, those committed by banks’ staff remained dominant.
The report said the total number of cases reported was 2,295, with 1,667 of them committed by banks’ staff, either permanently employed or on contract.
source: ghanaweb
Registrar-General directs Companies to Change Auditors Before August 2022
The Registrar General has directed private companies to change auditors who have served for more than six years. The affected companies are to comply with the directive before August 2022, the Registrar General, Mrs. Jemima Oware, told the Graphic Business on Tuesday.
Mrs. Oware said the move was in compliance with Section 139 (11) of the Companies Act, 2019 (Act 992), which required that auditors that had served for more than six years be replaced and must not be reappointed to audit the company unless after six years.
The section states that “An auditor shall hold office for a term of not more than six years and is eligible for appointment after a cooling-off period of not less than six (6) years.”
Exempted companies
The Registrar General said apart from specialised institutions such as banks and non-bank financial institutions (NBFIs), insurance companies, capital market operators and special purpose vehicles (SPVs) that were regulated by special legislations, all companies were enjoined to comply with the directive.
The various regulations governing the operations of these specialised institutions already require that they rotate their auditors after a period of five to seven years.
Mrs. Oware said although Act 992 did not specify when the requirement should take effect, the Committee of Experts that worked on the formulation of the law and were now helping with its implementation had explained that the provision must take effect now.
As a result, she said, the directive impacted companies whose auditors had served six years or more prior to the coming into force of the law in August this year.
She explained that the current directive was to ensure that all affected companies were in line to effect the changeover of auditors at their next scheduled annual general meetings (AGMs) but not later than August 1, 2022.
Essence of rotation
One of the novel requirements under the Companies Act, experts concur that the provision for the rotation of auditors would help to reduce audit risks arising from auditors being familiar with a company due to years of continuous auditing.
Mrs Oware said the provision would also help to prevent complacency among auditors which had the tendency to undermine professionalism and ethics.
Using the circumstances that led to the Bank of Ghana (BoG) closing down nine banks and 370 other institutions between 2017 and 2018, she said it was evident that some of the auditors had become too familiar with institutions and had, therefore, failed to ensure strict compliance with requirements.
“Most of those auditors were compromised and that was only possible because they had been there for years and so found themselves too familiar with the company. Because of that, they failed to question certain practices,” she stated.
According to the Registrar General, her outfit was trying to avoid similar occurrences in the auditing of companies regulated only by the Companies Act.
Possible penalties
While advising companies to comply with the directive, Mrs. Oware said her outfit was confident that all affected businesses would effect the changes to their auditors by the due date.
On whether or not the Registrar General Department would sanction erring companies, she replied in the negative.
Meanwhile, Section 139 (10) of the Act makes it an offence to contravene Section 139.
The provision states that both the company and its officers would be made liable and punishable under the Act in the event of a contravention.
Coffee Development Programme Doubles Industry Output
Government has introduced Coffee Development Programme to support the growth of the industry.
The programme, spearheaded by the Ghana Cocoa Board, has already led to the doubling of output to above 12,000 tonnes per annum with yields about 1.4 tonnes per hectare.
Mr Owusu Afriyie Akoto, the Minister of Food and Agriculture, made this known at the 60th General Assembly of the Inter-African Coffee Organization (IACO) held virtually in Accra on Tuesday.
He said to consolidate the gains and propel the Coffee Sector to a similar status as cocoa in Ghana, COCOBOD was in the process of creating a division.
The division’s mandate, among others, would be to intensify support to the coffee sector through research, extension support, and regulation of marketing and processing activities.
He said Ghana was processing and consuming more than 90 per cent of its coffee production annually.
He said, “The Ghanaian Coffee Industry, like many others in Africa, is undergoing a revolution. A revolution underlined by the desire to transition from colonial legacy to African autonomy.”
He said Coffee was one of the major cash crops promoted by colonial masters, hence, post-independence, the major market for coffee remained outside the continent.
The Minister, who is the Chairman of IACO, said African producers had continued to target Europe and North America as the key market for export of coffee beans.
He said by this arrangement, the fortunes of the hardworking producers were tied to a volatile market, underpinned by the economic conditions of those economies.
“One of the valuable lessons from this pandemic is the domestication of critical commodity value chains,” he said.
He said increasing continental consumption and raising the level of domestic value addition of these commodities was long overdue.
He said the slow pace of industrialization was not matching up to the needs of the young and vibrant African population.
“This situation has resulted in huge imports of finished products from other parts of the world,” he added.
He said the government was committed to intensifying the effective participation of the private sector in the Coffee value chain.
He said the rising urbanization provided an available market for Coffee producers in the country, saying a sizable and urbanized population with rising incomes presented opportunities for the African private sector to increase value addition of products on the continent.
Mr Akoto said the African Continental Free Trade Area (AfCFTA) creates an opportunity for Intra-African trade to open up markets for agricultural produce.
Dr Frederick Kawuma, the Secretary-General of IACO, said they were collaborating with the African Union to boost the production of coffee on the continent.
He said Africa was the world’s largest producer of the cash crop, however, they were making woefully less in income.
Dr Kawuma said they were making inroads in calling for amendments of the international pricing of the commodity for farmers to earn more.
He said the local industries had suffered dwindling production.
However, they were interventions in place at the regional and local levels to scale up production through research and development, seedling distribution and disease control.
source: ghanaweb
Energy experts push for change in tariff structure
Experts in the energy sector have called on government to effect changes in the pricing of tariffs in the country, to eliminate the policy which makes industries subsidise the amount households pay for their consumption of power – saying the practice has become a burden on businesses and is making them globally uncompetitive.
The experts, who spoke on the theme ‘Powering Ghana’s Industrialisation Drive: Progress Made Toward Reliable, Affordable and Clean Energy’, at this year’s Ghana Economic Forum organized by the B&FT in Accra, said the policy has added to factors accounting for the high cost of power to industry – which in turn increases operational cost of businesses and puts them in a disadvantaged position compared to their competitors in other countries.
One of the panelists, Ishmael Adjekumhene – Executive Director of the Kumasi Institute of Technology and Energy (KITE), said the high cost of power, among other factors, has resulted in the closure of some businesses; hence, it is about time the policy was reversed.
“We have a tariff system that is actually penalising industry because industry is cross-subsidising residential consumers. How do we deal with that? There are companies which have been disconnected from the grid because they cannot afford to pay for power, for the simple reason that industry is subsidising residences.
“So, there has to be a policy in place that addresses this problem… If we want the industry to be competitive, then the tariff structure has to change. It is about time we faced that reality, otherwise all our industries will not be able to afford power,” he said.
Executive Partner of Arthur Energy Advisors, Engineer Harriette Amissah-Arthur, also bemoaned the cost of power in the country which, she said, has made industries uncompetitive compared to their peers on the continent and in the world; hence her support for the policy to be scrapped.
“Industries in Ghana compete with other industries in the world. So, it is important for us to look at how we run our industries and how they are run on the world stage. In the medium to long term, our goal should be building a sustainable power sector. No matter the technology we use in this country, the key thing is for us to be competitive. I agree that households should not be subsidised by industry,” she said.
Segun Sowandey, Partner-KPMG Nigeria, also re-echoed the point, saying: “You will find that in most jurisdictions, especially in the West, the cost of power to industry is usually cheaper than the cost of power to residences. But in Africa and many emerging markets, cost of power to industry is higher than the cost of power to residential consumers. So, if we truly want to address the fundamentals, then we must eliminate those cross-subsidies,” he said.
Dr. Seth Debrah, Director-Nuclear Power Institute, said besides eliminating the cross-subsidy factor, another way of ensuring the industry has affordable power is to bring on board nuclear energy – which, he admitted, has an initial high cost, but becomes the cheapest source of power generation over the long-term.
“Nuclear power is high upfront cost, low running cost. Nuclear is the only power plant that takes care of its waste even before you begin running it. So is unique in its own sense and that is how come nuclear is cheap, because you can have a high upfront cost and low running cost over a very long period. In South Korea, they are doing around 3 cents per kilowatt hour,” he said.
source: thebftonline
Taxation of online and digital transactions: Chartered Institute of Taxation to discuss way forward
The Chartered Institute of Taxation Ghana on Thursday 12th November 2020 gathered tax experts in Ghana to discuss the challenges of digital transactions and e-commerce and its effects on Tax and the fiscal policies of Ghana.
Online transactions have in recent times experienced tremendous growth, especially following the COVID-19 pandemic.
Companies and individuals now offer almost everything one can buy online. At both domestic and international level technology is changing work and life in general. Online retailer model is a new way of providing online platforms to sell goods or connect buyers and sellers in return for a transaction or placement fee or a commission.
Enterprises across all sectors are increasing their online presence to generate more business by reaching new customers at a reduced cost. Even traditional government agencies have embraced the benefits of digital activities. Online advertising companies such as Google, retail shops such as Amazon & eBay, travel companies such as Priceline and Booking.com, consumer asset sharing organizations such Airbnb, Uber & Lyft have created shift in the traditional business operations. Statistics from the worldatlas.com suggests that, internet users in Africa have grown by 13,898% since December 2000, from 4.5 million users in 2000 to 527 million users in September 2020. This represents 12.8% of the world internet users.
Digital transactions deliver greater choice, competitive prices, convenience to consumers in remote locations who may face difficulty in physically accessing those services. For many, especially the youth, the utility derived from the consumption of online and related services far exceeds that of non-digital services. For example, with Google drive- there is no need to import or buy Hard-drive to store data. Cloud computing allows storage of large data in remote areas through the web, Facebook Advertising offers fastest, cheapest way to reach large audience, WhatsApp has caused huge reduction in traditional SMS for telecom operators, iTunes has made importation of CDs a thing of the past, e-Books has changed the way we buy books.
Tax risk posed by the digital transactions
Despite the good side of technology, fiscal policies are less responsive to these new models. The emergence of Mobile money payment system in the with e-commerce has made the whole system difficult to track. The tax risk, in the form of tax avoidance or evasion posed by digital activities is high and the OECD report on BEPS action 1 puts it this way: “because the digital economy is increasingly becoming the economy itself, it would be difficult, if not impossible, to ring-fence the digital economy from the rest of the economy for tax purposes. The digital economy and its business models present however some key features which are potentially relevant from a tax perspective”. Thus there is a real tax challenges posed by the digital transactions through business models like e-commerce, app stores, online advertising, cloud computing and participative networked platforms. The OECD ha suggested to nations to modify their tax laws to address the issues. Digital transactions create challenges for value added tax (VAT) especially where goods and services are bought by individual consumers from suppliers outside Ghana.
Addressing tax challenges on digital and e-commerce transactions:
For domestic transactions, the challenges mainly relate to the GRA not been able to accurately locate this these businesses in order to tax them according to law. But for cross-border transactions, the issue becomes more complex. The fundamental question is whether tax authorities should use the same tax laws to tax online businesses or there is the need to impose special tax on online transactions. Some tax experts say digital activities are just a mode of doing business and should not be treated differently from any other sector of the economy so tax authorities should find ways of looking for those who transact business online. Imposing special taxes on particular ways of doing business may discourage innovation and risk.
Having special tax imposed on digital activities could have negative consequences for cross-border trade and investment. Countries should rather redefine their Permanent Establishment (PE) rules and Corporate Income Tax should be limited to where the value is created. Some counties have refined their PE rules to include “Virtual Service or Significant Digital Presence”. Kuwait, Israel and Saudi Arabia’s tax authorities have introduced the concept of a “Virtual Services PE”. This involves online activities that includes substantial advertising, marketing and customer relations management, service contracts signed online by consumers and the use of online services by consumers.
Some tax experts are however of the view that, special tax needs to be imposed on digital activities because the mode of operations possesses unique features. The digital activities provide room for base erosion and profit shifting and so such activities should be dealt with differently. Indeed, as a safeguard to the threat of technology on tax revenue, the OECD recommends (in addition to revamping the PE rules) to introduce options in domestic tax laws on in the form of a withholding tax on certain types of digital transactions and tax equalization levy.
Withholding tax on digital transactions
The OECD suggests that, one way of dealing with the threat of digital activities is to apply withholding tax on certain digital transactions.
Italy: Italy has a web-based taxation called “Tax on digital transaction” in 2018. The Web Tax is levied at a 3% rate on the value of each digital transaction and it is paid by the buyers of the services.
France: The YouTube Tax in France
Digital companies established in France or outside of France, offering access in France to audiovisual content, whether for a consideration or free of charge, are subject to a 2% tax based on the sale price or right of access and on the amounts paid by advertisers and sponsors in an attempt to subject foreign digital business companies to tax.
India 6% Equalization Levy
India imposes a 6% equalization levy to be withheld by Indian residents from service provider for specified digital services including online advertisements. The levy is not an income tax.
VAT on Digital Transaction
For VAT, the reaction has been to protect the revenue at country of destination. Ghana, South Africa, Kenya etc. imposes VAT on imported electronic services. In Ghana, the Value Added Tax Act, 2012 (Act 870) of Ghana contains provisions aimed at addressing the challenges posed by digital activities. Section 16 of Act 870 requires that an unregistered, non-resident person who provides telecommunication services or electronic commerce to persons for use or enjoyment in the country, other than through a Value Added Tax registered agent must register with the GRA if that person makes taxable supplies exceeding GHS200,000.00 in a 12-month period. But because it is self-reporting and payment, compliance was low in practice.
In other countries like Thailand, a draft bill on e-commerce proposed that a foreign company providing services through electronic media to a non-VAT registered person, and where the services are used in Thailand, must register and pay tax at 7% VAT for services such as Hotel booking services, e-books, movies, music, advertising, online gaming services and downloadable music and all downloadable digital content.
Uganda passed a social media tax which took effect on July 1 2018 and seeks to charge a fee per day for using 60 mobile apps including Facebook, twitter, Instagram and WhatsApp, yahoo, google hangout, YouTube.
The meeting is expected to generate options on How the digital economy should be taxed.
The writer, Francis Timore, is a Tax Consultant and a member of the Chartered Institute of Taxation Ghana.
source: thebftonline