The Ghana Investment Promotion Centre (GIPC) has downplayed the IMF's suggestion to Ghana to cut down on the number of tax exemptions allowed in the country.
According to the Chief Executive Officer of GIPC, Mawuena Trebah, reporting controls have been instigated to ensure revenue accruing to the state from companies exempted from tax, are duly accounted for.
“There are a number of reporting controls so you can see for yourself we offered this company five year tax exemptions, they are now generating 'X' billion in revenue which are accruing back to the state in the form of tax obligation so there is the proof right there,” she explained.
The GIPC boss is also confident that Ghana's ability to track down and recoup benefits accruing from tax exemptions in the long term, places the country in a better position to provide tax exemption to attract investments into the country.
“I think that our position is clear. They are not exemptions in and of themselves, it is how the exemptions are being offered, who they are being offered to and our ability to demonstrate and prove that for every single exemption that is being offered, we know what is accrued back to the country. Every time we offer exemptions to any company of any kind, the Ministry of Finance is aware of it they are able to track it likewise the Customs division as well as the GCNet,” she further intimated.
The IMF has suggested that Ghana cuts its numerous tax exemptions since in the Fund's view; the move has contributed to weakening government's revenue and its attendant impact on the economy.
In the first nine months of 2015 for instance, the fund maintained that the country made losses of about 1.6 billion cedis due to the granting of tax exemptions.
The figure was above government's target of 541 million cedis at the time.
The Ministry of Finance is set to introduce the tax credit system which is among other things to reduce the total tax exemptions for foreign businesses.
This will ensure that businesses make an upfront payment of the required taxes and given a credit note which will enable them credit themselves subsequently.
Meanwhile the CEO of GIPC, Mrs Mawuena Trebah tells Citi Business News tax exemptions are necessary and important in developing the business world and must be maintained.
“We don't think that as GIPC getting rid of exemptions is the right solution because the reality is that it remains a very powerful tool. We have talked about the competitiveness within the West African and maybe African context but as we slowly progress towards regional integration, actually, the exemptions regime is going to be very important for the choices that the business community will make both domestic and international”.
-citifmonline
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