The Acting National Coordinator for the Tax Justice Coalition of Ghana, Mr. Bernard Anaba, has called for the swift passage of the Tax Exemptions Bill in a bid to halt the damaging impact of tax exemptions on government’s revenue mobilization efforts.
According to him, it has become imperative for strong conditions for providing tax holidays to businesses, to help streamline and address the shortfalls in revenue mobilization.
“Tax exemptions, in general, have been an issue that all governments both NPP and NDC, in their past, have had issues with. But they have not been able to boldly deal with it. And this is affecting our domestic revenue mobilization efforts. So, when that was identified, we were hoping that in 2020, it could be passed to shore up national revenue”.
He also disclosed that, as the bill hasn’t even gone through the reading, it poses a problem for the Coalition, however, he remained optimistic.
“We know it has to go through about two different readings. So, we are not so hopeful that it will be able to pass in this seventh parliament. It could be relayed in the 8th parliament. We are asking Government to make it part of its first items of business in the next parliament.
“We are actually calling on the expedition of the process and also hoping that some input, to get public input into it”.
The Ministry of Finance in 2016, strengthened its effort in restraining the use of special permits that exempt imports from custom duties and VAT.
Similarly, in 2019, the Minister of Finance, Ken Ofori-Atta submitted the Tax Exemptions Bill to Parliament, nonetheless, data from the Ministry of Finance shows that tax exemptions in respect to import duties, import VAT, import NHIL, and Domestic VAT had grown from GHC392 million in 2010 to GHC4.66 billion in 2018.
The main reason for the Bill is to justify the current exemptions regime on taxes, levies, fees and charges to improve domestic revenue mobilization.
Essentially, the fundamental Provisions of the Exemption Bill, 2019 contains preliminary provisions that seek to establish its objective and application, define tax exemption and rationalize the current exemptions regime by making changes where necessary, consolidate existing statutory provisions on exemptions, and provide for the administration of exemptions.
Also, grants exemptions to privileged persons, diplomats and diplomatic missions, persons with disability, religious persons, donors and charity organizations, and other privileged persons; exempts goods imported by the President or on his behalf for personal use from customs duties, taxes and port charges; and provides, on reciprocal basis, exemptions from the payment of custom duties and taxes on household and personal effects, vehicles to diplomats, employees of the United Nations, the African Union, Community of the West African States, the Commonwealth.
Grants tax exemptions to private businesses, including free zone enterprises, special tax incentives for strategic investments, and general tax incentives, and stipulates the procedure for granting such special tax incentive.
It as well provides for a number of miscellaneous issues, including executive approval in emergency situations where Cabinet approval cannot be obtained; transfer of ownership of exempt item by a holder of an exemption; offences and penalties for unauthorized commitment, provision of false information or document, failure to disclose and/or report relevant information and their associated convictions to fines and imprisonment.
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