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24.02.2005 Business & Finance

BUDGET: Corporate tax slashed to 28 per cent

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Accra, Feb. 24, GNA - Government said on Thursday that it would reduce corporate tax this year to 28 per cent, down from the 32.5 per cent in the 2004 Budget, with a view to easing pressure on companies and enabling them to expand their operations while increasing job openings. The figure would further drop to 27 per cent in 2007 to position Ghana with Botswana and Mauritius, both destinations for strong foreign direct investment.

Mr Kwadwo Baah-Wiredu, Minister of Finance and Economic Planning, said this in the 2005 Financial Statement to Parliament in Accra on Thursday.

He said withholding tax rate on goods and services had also been reduced to five per cent, down from 7.5 per cent. The Finance Minister said companies listing on the Ghana Stock Exchange were to enjoy a reduced corporate tax rate of 25 per cent. "... This is to further motivate increased listing on the Ghana Stock Exchange."

Outlining incentives for the Private Sector, Mr Baah-Wiredu said the Venture Capital Trust Fund would be put into operation to facilitate access to capital and a Long Term Savings Scheme to mobilise savings would be made operational.

He said the Government would encourage commercialisation of research and development and give support to industries that commercialise research findings.

Other options are to increase value addition in tomato processing and promotion in Techiman in the Brong Ahafo Region. It would also source funds to procure 840 agro-processing machinery and storage facilities.

On mining, Mr Baah-Wiredu said the Government was supporting the establishment of a College of Jewellery in Accra and a Department of Jewellery at the College of Art of Kwame Nkrumah University of Science and Technology (KNUST) in Kumasi.

"Government has also given the green light for the establishment of the first diamond cutting plant in Ghana by a private company as a clear manifestation of Government's catalytic role to Private Sector initiative," Mr Baah-Wiredu said.

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