The Ministry of Finance says it incorporated Agyapa Royalties Limited in Jersey to make it tax-efficient and give shareholders the best out of the transaction.

The Agyapa Royalties Limited deal allows the country to use a Special Purpose Vehicle secure about $1 billion for large infrastructural projects.

At a press conference Thursday evening in Accra, Charles Adu Boahen, a Deputy Minister for Finance defended the deal vehemently:

He said: “Anybody who thinks that we are using [the Agyapa deal registered in Jersey] for something naughty, he himself knows why he thinks that.

“We used it because it was a tax-efficient avenue to use. If we had decided to transfer the royalties to Agyapa that was domiciled in Ghana, we would have ended up in a situation where we would be paying tax twice.”

Adu Boahen explained further: “The royalty flows itself is a tax. It would have come to Agyapa as a company incorporated in Ghana as a revenue stream. It will then come out as an income, profit after tax. So that profit will be taxed before you get your net income which will then come out.”

He continued: “By routing it through Jersey, the 100 per cent comes in and goes out as the same hundred [per cent] less whatever operating expenses, there are no taxes, which means that the shareholders are getting the full benefits of that 100 per cent of royalties.”

Adu Boahen stressed: “It also means that the valuation of the companies will be 25% higher than if this was domiciled in a tax jurisdiction.”

The Minerals Royalties Agreement and other supporting agreements passed by Parliament is said to be in line with the Minerals Income Investment Fund (MIIF) Act of 2018 (Act 978). The agreements were passed without any support from the Minority.