According to the commission, the decision to sanction defaulting companies should eliminate the practice.
Ghana's Petroleum Commission is revoking the licences of local companies fronting for foreigners, here's why
The Petroleum Commission in Ghana has served notice it will revoke the licenses of local companies that front for especially foreign firms in the petroleum sector.
The CEO of the Petroleum Commission, Egbert Faibille Jnr said this while speaking at the 2019 Local Content Conference and Exhibition in Takoradi, Ghana.
In Ghana, local companies assume corporate images of foreign ones to enable them access some incentives for their operation has been cited as a major challenge for operators in the petroleum sector.
The development has made it difficult for some local companies to access contracts and other opportunities in the petroleum sector.
This has, hence, driven the Petroleum Commission CEO to announce the sanction.
He said, “We have identified most, if not all of the strategies that have been used for fronting. The era of fronting is about to end. Beginning next year, the Commission is working with other state actors including the Registrar General’s Department and the Ghana Revenue Authority to begin the enforcement of the relevant laws including tax assessments on the basis of one’s equity participation and hence profit sharing.”
Adding that “There would be revocation of operating permits and non-issuance of permits to indigenous Ghanaian companies and their partners who are proven after thorough investigations to have engaged in fronting.”
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