The Tax Exemption Bill 2021 has been laid in parliament for approval.

The bill is expected to regulate government and parliament’s approval of tax exemption for companies and related matters.

The bill was laid in parliament on 16th November 2021 by the Majority Leader and Minister for Parliamentary Affairs, Osei Kyei-Mensah-Bonsu on behalf of the Minister for Finance, Ken Ofori Atta. It was read for the first time and referred to the Committee on Finance.

Minority Leader Haruna Iddrisu told the house after the bill was laid “this is not the first time a tax exemption bill is being presented before Parliament.”

“When Mr. Ken Ofori-Atta became Minister for Finance, he brought it in the highlights of one of his first major budgets. It is languishing in a Committee of Parliament, so the Table Office should check the records to see if we are not accommodating two bills on the same subject matter,” he 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, after two or three years, they are back to appreciate that they need exemptions bill,” the Minority leader said.

“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,” he added.

Second Deputy Speaker Andrew Amoako Asiamah referred the bill to the Finance Committee for consideration and report.

Background
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.

Some civil society groups have since been championing the re-introduction of the bill to 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 previous 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 said.

They are urging the government and the house to prioritize the bill this time around and get it passed.