RE: Merely using a tax haven isn't a crime-Ace Ankomah (2)
By: Prof Lungu

May 12, 2016


"...Ghana’s attempt to unveil the true owners of businesses...through legislation has been received with low commitment, the Co-Chair of the Ghana Extractive Industries Transparency Initiative (GHEITI), Dr Steve Manteaw has said... Rather, attempts to introduce the Beneficial Ownership Disclosure clause in both the Companies Act and Exploration and Production (E&P Bill)...was met with opposition and has subsequently being expunged...", (Graphic Business News, 10 May 16).

"...In another transaction identified by ActionAid as a tax dodge, Accra Brewery borrowed £8.5m...in 2009-10. The loan was more than seven times Accra Brewery's total capitalisation...(The)..interest costs on this loan charged to Ghana will wipe out £76,000 of Accra Brewery's tax liability each year.... SABMiller has numerous subsidiaries offshore, including 11 in Mauritius, eight in the British Virgin Islands, six in Switzerland...six in British crown dependencies..." (The Guardian, 2010) .

We learned today that ministers in Ghana have deleted a section of a public interest bill that would force owners of companies with interest in Ghana to show directly who owns those companies. This includes the more than 32 companies we last counted that had "interest" in Ghana's oil, and of course, every other company. That, we must say, is a perfect "haven" for those individuals making billions from Ghana's oil and other resources whilst the vast majority of Ghanaian suffer without good schools, hospitals, roads, housing, doctors, and electricity/POWER.

As we said the last time, it is a mighty long way from Panama, Central America, to Accra, Ghana! In fact, according to our ace internet-information robot, Panama, where the HQ of the Mossack Fonseca law firm sits, is precisely 8,725 miles from Accra, as the crow flies. As such, from Accra, we'd have hoped that our Mr. Ace Ankomah would not have trivialized, in a rather petty fashion, the "Panama Papers" Tax Haven, cum money-laundering, cum tax-evasion, scandal.

In fact, it is painfully apparent to us that our Mr. Ace Ankomah is "merely" looking at the Mossack Fonseca Tax-Dodge facility for rich and powerful politicians from Africa (and Ghana where it truly matters to us), from the perspective of a solitary but pompous individual with too much into theory. That is the world of the private company desiring to preserve, and add to their "shares", resources that actually did not belong to them in the first place.

Ace Ankomah totally neglects the important detail in the record that shows Mr. Kuffour and his family did not have that account until he became the President of Ghana, that, staffers in an office of Mossack Fonseca warned supervisors about multiple instances of corruption related to the Kuffours and their accounts. In fact, of the records thus far published, none is so disgracefully read.

Significantly, our pompous Ace Ankomah totally neglects aspects of public policy that are inter-twined, that ought to be of concern to taxpayers, as citizens, including those who happen to be lawyers, accountants, politicians, and prosecutors. And so, we will admit that from our lowly vantage position, unlike Ace Ankomah, we've not seen citizens anywhere:

"...the whole world...jumping up and down like... (they)... have ants in...(their)...pants because some people choose to keep monies and incorporate companies in tax havens...".

Maybe Mr. Ankomah is too mired in his old "grad school" days when he found the "sexy" in "Tax law", notwithstanding the counsel he received from professors practicing with century old textbooks that Tax Law in college was actually "supposed to be boring".

So, maybe, just maybe, Mr. Ankomah has been counting too many "beans" that are not his. Or, they may be beans not earned the old-fashioned way, as in, "legally" and totally free of "Dodgy-Dave International Crow-Flying Business Acrobatics", (ICFBA).

Fact is, today, we all live in a global, inter-dependent, information age. Today, business is still king and agile, multi-billion dollar companies are controlling titans. Most of the titans seek the cheapest rents so they can pay the lowest. That affords them the ability to award themselves and their corporate chief executives and financial officers multi-million dollar annual incomes and golden parachutes. Increasingly, with sophisticated marketing strategies and public relations budgets and annual sales several orders bigger than the annual incomes of many African countries combined, the "Panama Papers" and the tax havens they speak of constitute another cruel grievous betrayal of Africans by their politicians, after colonialism and neo-colonialism.

There is a lot more to any value than "merely" the "legal", Mr. Ace Ankomah!

Today, there are at least seven (7) things we knew before, and know even now, that must have escaped Ace Ankomah since the leak of the Panama Papers.

Today, we know that:

1. NDC MPs, abetted by NPP MPs, are indirectly promoting tax havens surely under the eyes of Ghanaians in their refusal to pass laws requiring identification of persons who own oil and other business interest with origins in/from Ghana.

2. The Guardian, (2010) reported back in 2010 that ActionAid identified SABMiller, owner of Accra Brewery, as a tax dodger that uses the business strategy called "thin capitalization:

"...In another transaction identified by ActionAid as a tax dodge, Accra Brewery borrowed £8.5m from the same Mauritius company in 2009-10. The loan was more than seven times Accra Brewery's total capitalisation. ActionAid's tax expert estimates that the interest costs on this loan charged to Ghana will wipe out £76,000 of Accra Brewery's tax liability each year.... SABMiller has numerous subsidiaries offshore, including 11 in Mauritius, eight in the British Virgin Islands, six in Switzerland and six in British crown dependencies..." (Felicity Lawrence, The Guardian) .

3. It is politicians such as Mr. Agyekum Kuffour who make laws. It is they who create tax loop-holes that allow people like Mr. Ankomah to simply grab using self-serving Dodgy-Dave ICFBAs.

4. We know now that at least in the case of Ghana, former president Mr. Kuffour his son (also an accountant), and his wife, have all been implicated in the "Panama Tax Haven" expose

5. We know that the Prime Minister of Iceland, Mr. Sigmundur David Gunnlaugsson, before charges have even been filed, has resigned amid the controversy over his offshore tax haven holdings

6. We know that "....Officials in France, Germany, Austria and South Korea....were beginning investigations into possible malfeasance, from money laundering to tax evasion. France’s finance minister, Michel Sapin, told Parliament the government was putting Panama back on a Blacklist of havens for tax evaders..." . (As we are writing this article the offices of Mossack Fonseca is being raided by Panamanian officials,

7. We know that based in part on the disclosure of the Panama Papers, the United States treasury has now tightened the approval limits for inversions. "Inversion" is the practice whereby American companies acquire companies from other countries where taxes are lower, "merely" to relocate their Headquarters to those countries on paper.

8. We know that in Britain as well, Prime Minister David "Dodgy" Cameron is facing strident calls his resignation and a government inquiry into the matter. Dodgy Dave is being accused of bald-faced hypocrisy by championing financial transparency while benefiting from his family offshore tax haven accounts at the same time.

So, the way we see it, what Mr. Ankomah wrote is "merely" a theoretical exercise.

Ankomah talked a lot about the many courses in tax law he took, many years ago. Unfortunately, he does not seem to recognize, directly or indirectly, that tax laws do not come from "Haven". Rather, they are in reality written and enacted by politicians like Mr. Kuffour. As a result, there is actually nothing serious or "applied", in the critical sense, looking at Mr. Ankomah's boastful homage to tax havens.

In fact, if Mr. Ankomah, the African, was a tad serious, rather than "jump like ants were in his pants" when he read about Mossack Fonseca, he would have instead hollered the following 5 pointers to the open Ghanaian skies for the record:

1. Hear it, Mossack Fonseca customers from Africa have already paid taxes on the money they've sent to the tax havens

2. Hear it, Mossack Fonseca customers from Africa are actually spending the money in the African countries in which they made those incomes and profits, thus benefiting the economies of those countries directly, and indirectly

3. Hear it, Mossack Fonseca customers from Africa are merely shifting their tax obligations to a lower tax administration area within the same political boundary, within the same country

4. Hear it, the Mossack Fonseca tax havens pay higher interest than they can get in their own countries!

5. Hear it, there are absolutely no ethical boundaries that when crossed, permit a sacking of politicians involved with a Mossack Fonseca tax haven by citizens who pay the salaries of politicians by the "mere", simple, act of that ownership.

But Mr. Ace Ankomah makes none of those claims.

Instead, Mr. Ankomah merely reminisces about 25-year old lectures that were in reality probably more than half-century old at the time he heard them because the people who originally wrote those papers had been mostly dead the previous half-century, and counting.

Talking about confused minds!

But, this is still the global, information, inter-connected, business age!

It is politicians who still decide what tax laws they will write and enact!

It is top-echelon state tax law administrators who still decide what tax cheats they will go after!

And, there are numerous cases where politicians have not changed or passed laws because the status quo benefits them, and their fat pockets.

So yes, Ace Ankomah, even if we were to throw away all unethical prohibitions that cry "sacking" and "resignation" of public officials and bureaucrats for engaging in Dodgy-Dave ICFBAs:

"...the mere use of tax havens (CAN) be a crime or evidence of corruption...".

In fact, in addition, those same factors could then be evidence of civil offenses where, for example, the "managers" come way ahead with billions of dollars in their pockets, while shareholders are left holding empty bags.

So tell us now, Mr. Ace Ankomah!

Shouldn't we be a lot more critical and reflective?

Can't we try to be more balanced in our reflections, "grad" school graduate, or not?

Can't we try to discern the larger public policy implications for the things we see, say, hear, and do?

Is it not those things that also ought to matter more to Africans and the hyper-poor communities in this age, inside and outside Accra?

Again, in closing, we urge our Mr. Ace Ankomah, the Philip Baidoos, and others of similar mind, to take a minute to watch that 30-second video2 about that 10-year old American lad talking about the law, lawyers, taxes, and yes, prisons!

Get the dockets, partners!

Get the readings glasses with all those imported gold rims, partners!

So it goes Ghana!


NOTES & SOURCES:
1. Jessica Acheampong. 10 May 2016. Graphic Business News. Low commitment to beneficial ownership disclosure
(http://www.graphic.com.gh/business/business-news/63606-low-commitment-to-beneficial-ownership-disclosure.html/).

2. Dodgy-Dave International Crow-Flying Business Acrobatics (ICFBA, pronounced, 'Ikf-ba', ©Prof Lungu(2016).

3. Ace Ankomah. Merely using a tax haven isn't a crime- Ace Ankomah, (http://www.ghanaweb.com/GhanaHomePage/features/Merely-using-a-tax-haven-isn-t-a-crime-Ace-Ankomah-429481/).

4. Caroline Humer and Ankur Banerjee. Pfizer, Allergan Scrap $160 Billion Deal After U.S. Tax Rule Change, (http://www.reuters.com/article/us-allergan-m-a-pfizer-idUSKCN0X3188/).

5. Felicity Lawrence. 2010. Brewer accused of depriving poor countries of millions in revenue. The Guardian, (http://www.theguardian.com/business/2010/nov/29/sabmiller-india-africa-actionaid-report/)

6. Philip Lewis (Mic). 10-Year-Old Explains Wealth Inequality in the Justice System Better Than You Ever Could, (https://www.yahoo.com/news/10-old-explains-wealth-inequality-190400061.html/).


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