Minister for finance, Ken Ofori Atta is believed to have breached article 174(2) of the 1992 constitution, GIPC Act 2013 (865) as well as inter-country protocols on trade and investments through the withdrawal of tax exemptions from strategic investing companies in Ghana.
This was largely confirmed by Kweku Kwarteng, deputy minister designate for finance during his vetting in parliament today.
The Ghana government through the minister for finance has written to withdraw legitimately and lawfully granted tax exemptions from strategic investing companies in Ghana - a move which completely shoots down the one district one factory policy which is aimed at bringing strategic investors into all districts of our country to create employment and economic development.
Many strategic investors have chosen Ghana ahead of its West African neighbours because of the tax exemption incentive through the Ghana investment promotion Act. 2013.
According to Kwaku Kwarteng who is also MP for Obuasi West, the move by government is intended to deal with irregularities in the exemptions regime.
Answering a question from Minority Leader Hon. Haruna Iddrisu as to why such a counter-productive measure is being used by government to scare away strategic investors, Mr. Kwarteng said he supports the measure because the ministry of finance has given a good reason for it’s decision.
'The minister of finance has responsibility to administer tax exemptions. There will be a refund to those beneficiaries. I know the implementation of that has started. In my humble opinion, so long as the value of the tax is removed from the beneficiaries, it constitutes a fair administration of the exemption especially as we have been told by the ministry of finance that it is intended to deal with irregularities of the exemptions regime’’, He said.
The Minority Leader Haruna Iddrisu, however, challenged the deputy finance minister designate that the withdrawal of the tax exemptions from strategic investors by the ministry of finance is a breach of the Act of parliament which approved the tax exemptions to these strategic investing companies and since the current tax variations by the ministry did not receive approval of parliament.
Article 174 (2) of the constitution states ‘’Where an Act, enacted in accordance with clause (1) of this article, confers power of any person or authority to wave or vary a tax imposed by that Act, the exercise of the power of waiver or variation, in favour of any person or authority, shall be subject to the prior approval of parliament by resolution’’.
The withdrawal of the tax exemptions by the finance ministry has received a backlash from the business community especially foreign and local strategic investors who feel unfairly treated by the new government’s directive because of the sudden financial burden it has brought to their businesses.
The Ghana Investment Promotion Centre Act 2013, (865) ‘’provides for the encouragement and promotion of investments in Ghana, to provide for the creation of an attractive incentive framework and a transparent, predictable and facilitating environment for investments in Ghana’’.
It is believed that, the decision if not reversed by the finance ministry, could see a massive drop in the inflow of strategic investments into the country and it has the potential of scaring away existing strategic investors from Ghana with the end result being a drop in economic activity and job creation.
Source: Peacefmonline.com
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I think it is ok to withdraw all the tax exemptions. Study and analyse the type of exemptions, period of exemptions, quantum of exemptions. Wholesale exemptions should not be the norm. It is necessary to ascertain whether the said investor qualifies for the exemption. Thereafter, streamline things so that the country is not short-changed. Things must be done right.
@JAKE. The Nana Addo government is mainly relying on investors to implement the one district one factory policy. In doing that, the government through the budget planned on giving special incentives to investors that establish factories in rural constituencies. Now, even before the Nana Addo's one district one, one factory policy, the government of Ghana through parliament approve tax exemptions to strategic investments in Ghana. Therefore if the Nana Addo's government policy of one district one factory is to become more attractive to foreign investors, then it is even necessary to allow the tax exemptions which have been there to remain. Then foreign investors would consider both the tax exemptions and the special incentives offered by the government decide on coming on board for the one district one factory. Therefore taking off the tax exemption is indirectly shooting down the one district one factory policy
The Nana Addo government is failing on giving details and better explanations to their policies. Many things seem not clear in most of the policies. First of all,What are some of the irregularities they are seeking to deal regarding these strategic investments. Secondly how would the government refund such tax exemptions to these investors , if the exemptions are taken away. Obviously this policy will go through parliament and the majority will have their way.
Mr Finance Minister, I am all for the withdrawal of taxes that only inure to the benefit of these strategic investing companies. However, we SHOULD NOT lose sight of the fact that it was an ACT OF PARLIAMENT that approved the tax exemptions. We ain't in the jungle so I suggest we do things LAWFULLY and go back to parliament AND SEEK PARIAMENTARY APPROVAL for any form of variations on these tax exemptions to these companies. We can just take the law into our own hands and BREACH rules...I think that is the essence of what Haruna was pointing out today.
Seriously,who edits these articles? Kindly up your game whoever you are...let your intellect show, don't be a waste of space.
How does the withdrawal of these exemptions affect the one district one factory policy??? Peacefmonline please get serious wai!!!
This this writer listen to the NPP 2017 budget? If Ghana media houses continue to hire journalist with LOW understanding of issues like this, then it is very unfortunate. The en block (whole sale) exemptions BREEDS corruption and that is what the WISE government is doing. If a company knows that it qualifies for exemption, let them first pay and then write for reimbursement. NO MORE CORRUPTION! WISE UP!
Gradually peacefmonline.com is becoming a weak intellectual online portal is either u easily copy stories or u write on things u dont understand....very sorry but if this website has a news editor i suggest he should be educated enough to prep his staffs. this article is cheap...whats the basis just a redrawal of incentives thats not helping our economy but the beneficiaries?