GRA hails Ghana’s victory in US$393m Tullow tax arbitration

The Ghana Revenue Authority (GRA) has welcomed an international arbitral tribunal’s decision to dismiss Tullow Ghana Limited’s claims and uphold its US$393.09 million tax assessment.

The tribunal, constituted under the Rules of Arbitration of the International Chamber of Commerce, ruled in favour of Ghana in a dispute concerning the taxation of business interruption insurance proceeds.

It upheld the GRA’s tax assessment of US$393,091,993.70 and determined that the assessment did not breach the applicable Petroleum Agreements.

The tribunal also ruled that the assessment was not time-barred and that the GRA’s enforcement action was lawful.

Reacting to the decision, the GRA said the outcome strengthens its position that the tax assessment was made in accordance with Ghanaian law.

“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 it recognises the petroleum sector’s contribution to Ghana’s economy but maintained that companies operating in the country must comply with applicable tax laws.

It said its approach to tax administration would continue to focus on fairness, transparency, consistency and predictability.

The GRA also expressed appreciation to the Government and state institutions involved in the case, including the Office of the Attorney-General and Ministry of Justice and the Ministry of Finance.

It also acknowledged the contribution of its external legal counsel, Foley Hoag LLP, as well as its officers and technical teams.

The Authority said the award will now be implemented in collaboration with the government and Tullow Ghana Limited.

According to the GRA, the implementation will seek to secure revenues lawfully due to Ghana while ensuring that operations and investment in the Jubilee and TEN fields continue.

The case arose from a dispute over the taxation of business interruption insurance proceeds involving Tullow Ghana Limited.

Tullow challenged the assessment through international arbitration, leading to proceedings under the ICC Rules of Arbitration.

The tribunal’s decision has now dismissed the company’s claims and upheld the nearly US$393.1 million assessment.

The GRA said the outcome highlights the importance of “strong institutions, sound tax administration and the consistent application of Ghana’s laws.”