Dealing With Tax Exemptions A Key Area For Me – Ofori-Atta
Finance Minister-nominee Ken Ofori-Atta says reducing revenue lost to tax exemptions remains a key focus for him despite a lack of significant action in the last four years under his tenure.
Speaking during his vetting, Mr. Ofori-Atta said under revenue generation, the issue of tax exemptions, alongside harnessing revenue from property rates and digitalisation “are going to be key areas for me.”
“Let me assure you that these three will be areas of keen interest to ensure domestic revenue mobilisation,” the nominee assured.
When pressed on the lack of progress on legislation in the form of the Tax Exemptions Bill, Mr. Ofori-Atta retorted that work had been done.
“A lot has been done between 2017 and 2020 and we are grateful for that. Some things are yet to be done and these are the three I am committing to us doing before that time,” he said.
The government in the past has raised concerns with the amount of money lost from tax concessions.
In March 2019, the Minister of Finance, Ken Ofori-Atta submitted the Tax Exemptions Bill to Parliament.
Cabinet also amended the process for approving exemptions to include compulsory clearance by the Ministry.
The object of the Bill is to rationalise the current exemptions regime on taxes, levies, fees and charges to improve domestic revenue mobilisation.
This is to be achieved by consolidating existing statutory provisions on tax and other exemptions and providing for the administration of exemptions.
Data from the Ministry of Finance indicates that tax exemptions with respect to import duties, import VAT, import NHIL, and Domestic VAT had grown from GHS392 million in 2010 to GHS4.66 billion in 2018.
The Ghana Revenue Authority said it planned to review the country’s tax exemption laws to address revenue losses.
The GRA was concerned that the wholesale exemptions have resulted in exploitation where some beneficiaries eventually evade taxes completely.
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.