A day’s stakeholders’ workshop is underway in Accra to discuss ways of plugging loopholes in Ghana’s tax system caused by transfer pricing manipulation by some Multinational Enterprises (MNEs).

It is being jointly organized by the Ministry of Finance and Economic Planning (MoFEP), Ghana Revenue Authority (GRA) and GIZ, a German bilateral organization for key MNEs, selected tax accounting firms and some civil service organisations.

Transfer pricing had often served as a tax avoidance scheme for many MNEs to maximize their global after tax incomes.

In Ghana, it is estimated that transfer pricing fraud costs the country 36 million dollars each year.

The workshop therefore aims at establishing a comprehensive Transfer Pricing Regulations to stem the global phenomenon and its objective is to make the MNEs more transparent by disclosing and documenting their related economic activities.

Speaking at the opening on Wednesday, Mr Enoch H. Cobbinah, Chief Director at MoFEP, observed that transfer pricing manipulations impacted negatively on the country’s Gross Domestic Product (GDP), Balance of Payment (BOP) and on the value added tax credit scheme caused by small tax revenue.

He expressed the hope that the workshop would equip the participants with the requisite ability and will-power to establish and enforce effective transfer pricing guidelines while enabling GRA’s ability to defend the country’s tax base.

Mr Cobbinah announced that GRA was in the process of reorganizing itself to set up a special unit that would specifically deal with transfer pricing.

Mr Ali Nakyea Abdalla, a private consultant, said whiles the purpose of the workshop was not to defame MNEs especially where their inter group transfers or sales were done on an arm’s length basis (market price basis), manipulations of the transfers invoked serious tax concerns for governments.

“Transfer pricing by itself does not necessarily involve tax avoidance but where the pricing does not accord with applicable norms internationally or at domestic law, it is referred to as mispricing, incorrect pricing and unjustified pricing,” he said.