The Ghana Revenue Authority (GRA) has won an international arbitration case against Tullow Ghana Limited, with a tribunal upholding in full a tax assessment of US$393.09 million imposed on the oil producer.
The dispute arose from the taxation of proceeds Tullow received under a business interruption insurance policy.
The case was heard under the Arbitration Rules of the International Chamber of Commerce (ICC), following a challenge by Tullow to the GRA’s assessment.
In its decision, the tribunal rejected all the claims brought by Tullow and determined that the GRA’s assessment was lawful, consistent with the applicable Petroleum Agreements and not barred by the relevant limitation period.
The GRA, in a statement issued on Wednesday, said the ruling reinforces its position that Ghana’s tax laws must be applied consistently to all taxpayers, regardless of their size or industry.
“The decision affirms the Authority’s position that the assessment was made in accordance with Ghana’s tax laws and reinforces the principle that all taxpayers, irrespective of their size or sector, are subject to the laws of the Republic,” the Authority said.
The GRA said while the petroleum industry remains an important contributor to Ghana’s economy, tax administration must be conducted in a manner that is fair, transparent, consistent and predictable.
It added that its mandate extends beyond revenue mobilisation to ensuring equitable treatment of taxpayers and maintaining a stable environment for legitimate investment and business activity.
The defence of the tax assessment involved several state institutions and external legal advisers. These included the Office of the Attorney-General and Ministry of Justice, the Ministry of Finance and international law firm Foley Hoag LLP.
The Revenue Authority also commended its officers and technical teams for their role in defending the assessment.
According to the GRA, the outcome demonstrates the importance of strong institutions, effective tax administration and the consistent enforcement of Ghana’s laws.
Recovery of tax award
Following the tribunal’s decision, the GRA said it will work with the government and Tullow Ghana to implement the award in accordance with Ghanaian law.
The Authority said the recovery process would take into consideration both the State’s entitlement to revenues and the need to support continued operations and investment in the Jubilee and TEN oil fields.
“The Authority will work closely with the Government and Tullow Ghana Limited to give effect to the award in accordance with Ghanaian law,” the GRA stated.
It added that implementation would seek to secure revenues lawfully due to the State while supporting continuity of operations and investment in Ghana’s offshore petroleum sector.
The GRA further urged companies operating in Ghana to comply fully and promptly with their tax obligations.
It said it would continue to administer the country’s tax laws “without fear or favour”, while promoting voluntary compliance and maintaining a predictable tax environment for businesses and investors.
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