Avedzi questions inability of Finance Ministry to provide tax waiver policy

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The Deputy Majority Leader in Parliament, James Avedzi is not enthused about the failure of the Ministry of Finance to present policy on tax waivers to the House.

Parliament has not yet received a policy on tax waivers after many attempts to get such a policy regime in place.

Speaking on the Floor of Parliament during the debate on the approval of a $3.1 million tax waiver for technical and Vocational education centres, the Ketu North MP said the government must present the policy urgently to the house.

“Mr. Speaker, the Ministry of Finance promised to bring a policy on waivers to this House. I have raised this issue a number of times. We don’t know what is happening with regards to the policy. If we have that to the House and it’s referred to the [Finance Committee], we need a committee report to see what we can do,” Mr. Avedzi said.

Tax waivers and exemptions have been a point of concern from observers and stakeholders.

In 2019, the Senior Minister Yaw Osafo Maafo assured plans are in place to limit the amount of money lost from tax concessions.

Per most recent figures available, fiscal data from the Ministry of Finance showed that import exemptions granted to foreign companies and other institutions rose by 15.5 percent to GHS2.6 billion in 2017.

More recently, the President in his 2019 State of the Nation Address noted that tax exemptions in respect of import duties, import VAT, import NHIL, and Domestic VAT had grown from GHS392 million (0.6% of GDP) in 2010 to GHS4.66 billion (1.6% of GDP) in 2018.

In his delivery of the 2020 budget, the Finance Minister recounted some of the tax incentives provided to the private sector business promoters including a five-year corporate tax holiday for 1D1F companies, exemption from import duties, taxes and levies on equipment, machinery, and parts and further exemptions from payment of duties and levies on raw materials.

In the 2020 budget statement, the Finance Minister said the drive for more FDIs will revolve around better resourcing of the Ghana Investment Promotion Council (GIPC).

Tax incentives are generally viewed as an incentive for foreign direct investments (FDIs).

The Finance Ministry in March 2019 submitted to the Legislature a Tax Exemptions Bill for consideration and passage into law to regulate the application of tax and other exemptions, and to provide for related matters.

The government has also established an Inter-Ministerial Committee to provide coordinated policy guidance and support to the FDI drive, according to the budget.

The exemptions are mostly granted to businesses coming into the country through the Ghana Free Zones Authority (GFZA), GIPC as well as other specialised institutions.

One of the recent contentious exemptions was the decision to grant a $259 million tax concession to AngloGold Ashanti (AGA) as part of moves to re-open its Obuasi Mine, which was shut down in 2014.

There was also concern over waivers granted the operator of the Tema Port expansion project, Meridian Port Services (MPS)

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Source Author: Delali Adogla-Bessa