A tax exemption bill has been laid before Parliament for passage to streamline tax exemptions, Finance Minister Ken Ofori-Atta has said.
Speaking in Parliament last Thursday, Mr Ofori-Atta said the passage of the tax exemption bill would also help minimize its abuse.
The International Monetary Fund (IMF) backed government to overhaul its tax exemptions regime to boost its failing domestic revenue.
IMF in its review of Ghana said rationalising tax exemptions will improve government’s domestic revenue mobilisation.
Domestic revenue performance over the past two to three years has not met the budgeted estimates, with last year’s target falling short by about 10 per cent and prompting the government to realign its expenditure in view of the shortfall.
“…it was agreed that tax exemptions will be rationalised, and their management framework strengthened to improve domestic revenue mobilisation. The authorities estimate tax exemption costs to be as much as 1.6 per cent of GDP in 2018,” said Ms Annalisa Fedelino who led an IMF team to Accra in February to conclude discussions on the combined seventh and eighth reviews of Ghana’s Extended Credit Facility Programme.
President Akufo-Addo in his State of the Nation Address in February described the existing tax exemption policy as an Achilles-heel and a growing menace to fiscal stability and revenue generation.
In the last eight years, tax exemptions in respect of import duty, import VAT, import NHIL and domestic VAT have grown from three hundred and ninety-two million Ghana cedis (GH¢392million), that is 0.6% of GDP in 2010, to GH¢4.66 billion – 1.6% of GDP in 2018.
According to the President, this is not sustainable and the government intends to do something about it to reverse the trend – by introducing suitable measures that may disrupt the easy and comfortable arrangements many have become accustomed to.
Have your say
More Business Headlines
- Ghana, Cote d'Ivoire resume sale of cocoa beans
- UBA unveils marketing platform for entrepreneurs
- BoG keeps policy rate at 16%
- Electric car models to triple in Europe by 2021
- Boeing to take $4.9bn hit in second quarter on 737 Max grounding
- Ghana's debt now GHS200 billion
- Gov’t urged to formulate new tax compliance rules for increased revenue
- Vodafone talks private sector relevance in SDGs at UN Forum
- Nelson Mandela Day: Barclays, ALU scholars pay courtesy call on SA High Commissioner
- Insurance industry could wield more money than banks – Rev Okosun
- Engage NIC to avoid casualties - CIIG
- Kingdom Exim Ghana, CEO awarded at Ghana Shippers Award 2019
- Enforce laws barring foreigners from retail trade - Majority Leader to agencies
- GTBank, Ria partner Zeepay to launch Ria2Mobile money transfer service
- AirtelTigo mentors 40 young aspiring entrepreneurs