The Majority and Minority leaders in Parliament are calling for enhanced efforts to harmonise Ghana’s tax exemption regime.

Speaking on the floor of the House after the Tax Exemptions Bill 2021 was laid in the Parliament for approval, Minority Leader, Haruna Iddrisu, said “I am aware that a tax exemption Bill was announced in the 2017 Budget Statement and Economic Policy, a consequential referral was made and like I said, I do not know its status.”

“So, if after two or three years, they are back to appreciate that they need exemptions, we would take a very strong view and position on matters of tax exemptions and value for money. When we do take a position, we would communicate same,” the Minority Leader noted.

Majority Leader, Osei Kyei-Mensah-Bonsu, who laid the bill on the floor of the House on behalf of the Finance Minister, noted “the issue raised by my honourable colleague is a matter that is very germane and should really concern the entire House.”

“There are too many tax waivers and exemptions. We want to appreciate the impact of these waivers and exemptions on the economy when they relate to countries. We would also want to assure ourselves, whether or not reciprocity exists between Ghana and those other countries, so that we are sure of what we are doing as a country."

“Then also, when these exemptions and waivers have been granted, after the transaction is over or even sometimes when it is not over and is being implemented, equipment and vehicles are worn out, then you would see the companies go out there and sell the equipment and vehicles without paying duties. What is it that must be done?” he quizzed.

The Tax Exemptions Bill 2021 has since been referred to the Finance Committee of Parliament for the necessary consideration and report back to the house.

This is not the first time the bill has been introduced in Parliament. An earlier version introduced in 2020 did not get approved until the life span of the house expired.

Some civil society groups (CSOs) have since been championing the re-introduction of the Bill in the House for the necessary approval.

The CSOs include the Tax Justice Coalition (TJC), the Parliamentary Network Africa (PN Africa), and the Ghana Anti-Corruption Coalition Ghana (GACC), with support from Oxfam.

They are working under the banner Legislative Advocacy Working Group on the Tax Exemptions Bill 2021. The groups say the tax Exemptions Bill presented to the last parliament could not pass due to the lack of political will.

While the Finance Minister presented the Bill to Parliament, the Ministry did not show the same enthusiasm to ensure its passage, the CSOs claimed. They are urging the House to prioritize the bill this time around.

Ghana provides a number of tax exemptions and incentives to encourage private investment and reduce the tax burden on certain companies operating in the country.

These exemptions must necessarily be approved by Parliament first, after the companies apply to the Finance Ministry. Foreign companies have reportedly been the largest beneficiaries, but some local ones also do get it.

Statistics indicate that the state loses an amount equivalent to 12.5% of all taxes collected annually to tax exemptions given companies by government and Parliament.

The Bill, when approved, is expected to harmonise the tax exemption and incentives regime in the country and help make it more efficient.

An earlier attempt to get it approved in 2020 failed after the life span of the previous Parliament expired before approval processes were concluded.