Corporate Tax Still Needs a Downward Review - AGI
Although corporate tax has gone down, the Association of Ghanaian Industries (AGI) still sees it as uncompetitive and business unfriendly in the West Africa sub-region.
The Minister of Finance and Economic Planning, Hon Kwadwo Baah Wiredu last Thursday reviewed downward the corporate tax from 35% to 28% as well as other taxes in the private sector.
Corporate Tax and National Development Levy The Policy and Communication Director of the association, Mr. Cletus Kosiba told The Business Chronicle on Monday that the de facto corporate tax is 29.5%, which includes the 1.5% National Development Levy for all other companies. This, he said, was still high for the private sector of the economy.
"The government has addressed some of the issues we raised particularly on taxes. Most of the taxes have been reviewed downward although some did not meet the expectation of AGI, especially with the non-elimination of the National Reconstruction Levy."
The Policy and Communication Director said it was not much what government promises but the implementation of it thereof.
Creation of Parliamentary Budget Monitoring Body He revealed to the Business Chronicle that the government, in the past, has shown an attitude of non-implementation of budget policies saying that the upfront payment of Value Added Tax (VAT) on imported inputs provided for in the 2003 budget have not been paid since although about 20 companies qualified for it.
He recommended Parliament to set up a monitoring body to monitor and supervise the implementation of the budget to the letter. He called on the government to address holistically the problem of high cost of doing business in the country.
Use of subsidy savings The AGI urged the government to transfer all saved subsidy into the manufacturing sector as reduced taxes, tax holidays and other tax incentives. This, according to him, would reduce poverty through the provision of jobs and income for the teeming unemployed youth in the country. "Such monies should go into programmes that would support the growth of small and medium scale enterprises in both urban and rural areas, leading to poverty reduction in he country."
He said the income tax reprieves are not very significant, as the market was still shrinking and there was the need to address the purchasing power of Ghanaians. He recalled the statement made by President Kufuor about debates on the income policy of Ghana. He noted that since 2001, the President called for debate about the income policy, nothing concrete has been heard.
'Indutech' 2005 He said even though there have been some delays in the preparation of the fair grounds for exhibitors, all is on course for the grand opening of the 6th Industrial and Technology (Indutech) next Friday at the International Trade Fair Centre in Accra.
About 400 participants are taking part of this year's fair, including foreign participants. Participants from Turkey, Egypt, Belgium, and almost all ECOWAS countries are taking part in this year's fair. There would be special days for launching of products, especially ICT.