The Optimal Petroleum Fiscal Regime for Ghana: An Analysis of Available Alternatives

Yıl 2014, Cilt: 4 Sayı: 3, 400 - 410, 01.09.2014

Dankwa Kankam Ishmael Ackah

Öz

Ghana became an oil producing country in December 2010. This development renewed the expectation of the citizenry as to the revenue that will accrue to the state and its direct effect on standard of living. The purpose of this study was to evaluate the Ghanaian upstream petroleum fiscal regime, including state and investor shares, and to compare it with petroleum fiscal regimes of some six other oil producing African countries. The qualitative assessment compared the regime on general taxation and petroleum taxation in particular. The traditional Discounted Cash Flow (DCF) method was used in the quantitative assessment of the regimes. Out of the seven regimes used in the quantitative analysis, the Ghanaian regime ranks sixth in terms of government take. It also ranks second with 31 months investor payback period based on post-tax discounted cash flow. Though the Ghanaian fiscal regime appears to be progressive; thin capitalisation, royalty rate, and cost recovery limits withholding taxes on interest. Therefore tying of additional oil entitlements to profits are recommended in future reviews of the Ghanaian fiscal regime. It appears from the study that the Ghanaian regime is not optimal and the recommendation provided would help improve upon it.

Anahtar Kelimeler

Petroleum fiscal regime, oil revenues, taxation