Tax exemption policy growing menace to fiscal stability, revenue generation – Akufo-Addo

Tax exemption policy growing menace to fiscal stability, revenue generation – Akufo-Addo
Source: Ghana | Joseph Appiah-Dolphyne | JoyBusiness
Date: 21-02-2019 Time: 11:02:22:am
Share

President Akufo-Addo has said tax exemption policy has proven to be an Achilles heel and a growing menace to fiscal and revenue generation in the country.

Speaking at the State of the Nation Address in Accra on Thursday, President Akufo-Addo said: “Revenue mobilization poses the biggest challenge in the management of our economy with the tax exemption policy, in particular, proving to be an Achilles heel and a growing menace to fiscal and revenue generation.”

According to the President, in the last eight years, tax exemptions in respect of import duty, import VAT, import NHIL and domestic VAT have grown from GH¢392 million, that is 0.6% of GDP in 2010, to GH¢4.66 billion, that is 1.6% of GDP in 2018.

These figures do not include exemptions from the payment of corporate and individual income taxes, concessions on tax rates, petroleum tax reliefs, customs tax exemptions enjoyed by diplomatic missions, and waiver of processing charges at the ports.

“If we continue at this rate, in less than sixteen years, half of Ghana’s revenue base will be given away as tax exemptions.”

He added, “We intend to do something about tax exemptions, by introducing suitable measures that may disrupt the easy and comfortable arrangements that many have become accustomed to, but which we have to take to ensure that we have the firmest of foundations for the economic take-off that has escaped us for so long.

Earlier, Commissioner-General of the Ghana Revenue Authority (GRA), said discussions were ongoing with the government over a review of some clauses of the tax exemption laws. 

Emmanuel Kofi Nti said, called for a review or possible scrapping of tax waivers for multinationals and mining firms to complement revenue generation are justified.

“Gov’t is reviewing the area of exemptions overall and some of them there may be some set clauses and the duration for the exemption. We are looking at a situation where the law defines itself so that no one comes asking for exemptions,” he said. 

“We are aware of the implications for exemptions because it is revenue forgone and no one wants to sacrifice its revenue, so it is an area that government is looking at,” Mr Nti said.


Have your say  


More Business Headlines


What others are reading
Driver, mate in police officer assault charged
RE: Telcos asked to stop sale of sim cards on the streets
MTN Ghana enhances data experience for customers with 4G+ service
OBOSS shows who is boss in NSMQ2019 qualifiers