Deloitte’s October 2024 Oil and Gas Industry Survey has revealed that tax-related challenges continue to threaten Ghana’s petroleum industry. The report highlights the concerns of industry stakeholders, identifying high tax rates as the most pressing issue.
According to the survey, 46% of industry stakeholders cited high tax rates as the primary challenge facing the sector. This concern underscores the significant impact taxation has on profitability and overall growth.
The tax burden not only affects companies’ bottom lines but also hinders the industry’s competitiveness. This has sparked calls for reform to create a more conducive business environment.
In response to these challenges, approximately 42% of industry players are advocating for tax amnesty. They believe this measure would alleviate the tax burden and foster growth.
Foreign currency availability is another significant concern, with 80% of players requiring foreign currency to meet payment obligations. However, high exchange rates and forex unavailability pose substantial challenges.
Industry stakeholders urge the central bank to address forex unavailability, citing it as a critical issue. A stable forex regime would greatly benefit the sector.
On a positive note, the report reveals that 91% of industry players believe local content regulations are sufficient or somewhat sufficient to promote Ghanaian participation.
While local content regulations are deemed effective, concerns arise regarding their impact on foreign investment. Fortunately, only a minority of respondents believe the regulations discourage foreign investment.
Environmental, Social, and Governance (ESG) practices are also a priority for industry leaders. Top management officials emphasize the importance of publicly disclosing ESG practices.
With a rating of 4.22, transparency about environmental and social impact is deemed crucial. As Ghana’s petroleum industry navigates tax challenges, addressing these concerns will be vital to ensuring long-term growth and sustainability.
