THE Okyenhene, Osagyefuo Amoatia Ofori Panin, has appealed to governments across the developed world to grant tax exemptions to private outward remittances.
The Okyenhene's call to rich nations last week came ahead of news this week that private inward money transfers received from NGOs, religious groups and Ghanaians in the Diaspora – channelled through the banks and finance companies has shot up again, by 56%, to record heights.
His Majesty argued that immigrant workers transfer part of their salaries to their dependants back home for usually social goods. The Okyenhene is of the view that these remittances are arguably for “charitable purposes and must, therefore, be treated as such by tax regimes. Moreover, already a large chunk of these funds are transferred to the developing world by charitable organisations (NGOs), which enjoy tax exemptions from their countries of origin. His plea is for those sent by individuals to also attract zero income tax.
His Majesty's view follows that those individuals abroad, through their contributions, are by and large doing charitable work, too. “The remittances are sent home to alleviate poverty.
“Such money transfers are used to pay school fees, to pay hospital bills, to provide accommodation and even to buy food for dependents of working migrants. If these are not charitable purposes, then we need to be educated on what it is,” the Okyenhene stressed to unanimous nods from his audience. He made this revolutionary suggestion during a series of discussions with senior officials of the Dutch government at the country's Ministry of Foreign Affairs at The Hague last Thursday. Those His Majesty met included the Dutch Minister for Development Cooperation, Agnes van Ardenne.
The Okyenhene, is on a ten-day official working visit to the Royal Kingdom of the Netherlands which ends today.
The King of Akyem Abuakwa observed that it is common practice in the rich nations to grant part of a worker's salary that goes towards charitable ends tax exemptions. This incentive, he further noted, is designed to encourage more people to donate generously “to causes that are seen to serve mankind.” The Okyenhene acknowledged the contributions that countries, such as the Netherlands, are making to help developing countries shake themselves off the shackles of poverty, through aid and debt relief.
Yet, he stressed that remittances from their own countries to poorer countries, such as Ghana, are increasingly overshadowing the total aid advances made to the poorer world by the rich world on both bilateral and multilateral fronts. “We must acknowledge and encourage this welcome phenomenon as more of our citizens abroad take a greater share of the burden of poverty reduction and wealth creation,” the Okyenhene told his hosts. He said the challenge is to formalise a structure to turn this growing pool of financial resources into identifiable investments in the economy, as well.
Last year, the Okyenhene chaired an Accra conference that explored the multi-faceted issues related to migration and development within the context of the economic and social development of Ghana. It was held through a partnership initiative by the United Nations Development Programme, Institute of African Studies and the Royal Netherlands Embassy, and was meant to discover the linkages between migration and development and to ensure that migration becomes mutually beneficial to the sending as well as receiving countries.
The Okyenhene's call for zero tax for remittances coincides with another record increase in private inward remittances to Ghana.
Figures released Tuesday by the Monetary Policy Committee of the Bank of Ghana show that such money transfers amounted to US$2.35 billion for January-July 2005. This compares to US$1.51 billion for the same period in 2004 – whole 55.6 percent increase above last year's level. According to the Governor of the Bank of Ghana, of the total remittances received, $666.2 million (28%) was from individuals.
Remittances have enjoyed constant periodic hikes since 2001. The annual total for 2000 was below $350 million. Since then, a combination of confidence in the country and other factors has seen the figures shooting up.
At a colourful durbar held in his honour at Biljmer area in Amsterdam last Saturday, the Okyenhene appealed to Ghanaians abroad to extend their financial contributions back home beyond their immediate families. His Majesty appealed to Ghanaians abroad to sponsor the education of at least one child from their respective villages. “The cost of a single child's education for a semester is equivalent to the money you spend weekly on a Quarter Pounder McDonalds humburger,” he said.
The Okyenhene also asked Ghanaians abroad not to throw over board the values of the Ghanaian culture when they move abroad. “Assimilate you must, but take the good of Dutch culture and add it to the good cultural upbringing that you enjoyed in Ghana and leave alone the bad practices.”
He said Ghana was the best place to be and urged Ghanaians abroad not to wait until they reach pension age before deciding to come back home. He thanked them for their support in tackling poverty in Ghana and urged them to continue doing more.
During his Dutch tour, the Okyenhene has been led by Ghana's envoy to the Netherlands, Mrs Grace Ababio-Amposah. His Majesty's entourage includes the Abontendomhene of Kyebi, Osabarima Kyeretwie Boakye Danquah, Osabarima Adusei Peasah IV,Victor Asihene, DCE of East Akyem, Michael Kofi Mensah, DCE of Suhum Kraboa Coaltar, Kwame Gyan, legal advisor, Odehye Nana Poku Ofori Atta, Odehye Akosua Asabea, Her Royal Highness Mrs Elizabeth Ofori Atta, Nana Duodo Afari, Pusupusuhene, Edmund Boateng, Okyenehene's Private Secretary, Asare Otchere-Darko, the Okyenhene's Chief Press Secretary and others.