The government’s plan to grant tax waivers to 42 companies under the One District One Factory (1D1F) initiative has ignited a fierce legal battle, bringing to light longstanding controversies surrounding these tax exemptions.
The recent lawsuit, spearheaded by three Minority Members of Parliament, has cast a spotlight on the mixed reactions and accusations that have plagued the tax waiver requests from both the Majority and Minority Caucus in Parliament.
It is important to recall that the tax waiver requests have been a source of intense debate since their inception, with accusations and counter-accusations flying between the political factions.
In a notable development, the immediate past Chairman of the Finance Committee of Parliament, Honorable Kwaku Kwarteng, was accused by some members of the ruling government of obstructing the passage of the tax waiver request.
This controversy is widely believed to have contributed to his removal from the chairman position, underscoring the contentious nature of the issue.
The Legal Challenge
However, in the latest move, three Minority MPs led by their Deputy Leader, Emmanuel Armah-Kofi Buah have initiated a lawsuit against the Ghana Revenue Authority (GRA) and the Ministry of Finance, challenging the planned tax waivers.
The Members of Parliament including, Bernard Ahiafor of Akatsi South, Governs Kwame Agbodza of Adaklu, and Emmanuel Armah-Kofi Buah of Ellembelle jointly asserted that the tax waivers are not beneficial to the country.
They also strongly contended in their suit that the tax waivers were inconsistent with Article 174 of the 1992 Constitution, rendering them unconstitutional.
“It appears Article 174 of the Constitution is being violated, the Supreme Court is giving an exclusive jurisdiction to interpret, therefore, any citizen who is aggrieved that a particular portion of the Constitution is being contravened, the remedy available is to seek for interpretation and declaration at the Supreme Court which is the apex court.
“That is exactly what we have done in the circumstance, we’re seeking relief against the ones that are being implemented and the ones that are yet to be implemented”.
Bernard Ahiafor, MP Akatsi South Constituency
The three Minority Members of Parliament are therefore seeking a Supreme Court declaration that the waivers are null, void, and of no effect.
Bernard Ahiafor, one of the plaintiffs, urged the Supreme Court to intervene, emphasizing the importance of adhering to constitutional provisions.
As earlier mentioned, the controversy surrounding the government’s proposed tax waiver request to 42 companies under its flagship one district one factory initiative is not recent.
The controversy reached new heights on May 20, when the government released a list of companies requesting tax waivers under the 1D1F initiative.
The Ministry of Finance initiated processes in 2021 to secure approximately $335,072,712.13 in tax exemptions for 42 companies participating in the initiative.
The Exemptions Act, 2022 (Act 1083), was presented in Parliament by the former Minister for Finance, Ken Ofori-Atta, in 2022.
Among the companies seeking tax waivers, Sentuo Oil Refinery Limited, a newly established entity, has requested the highest exemption amounting to $164,633,012.00.
This significant request has drawn particular scrutiny, adding fuel to the ongoing debate. The latest lawsuit by the Minority MPs highlights the deep-seated concerns and opposition to the government’s handling of the 1D1F tax waivers.
It also underscores the need for greater scrutiny and transparency in the administration of tax policies and economic incentives
As the legal proceedings unfold, the Supreme Court’s interpretation and ruling on the matter will be crucial in determining the future of the tax waivers and the broader implications for Ghana’s fiscal policy and constitutional adherence.
The outcome will also likely impact the political landscape, influencing the ongoing discourse between the Majority and Minority Caucus in Parliament.
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