Government may be forced to eliminate tax exemptions in its tax laws as the International Monetary Fund (IMF) intensifies pressure on it to do so.
There have been several calls aimed at getting government to repeal the regime by several stakeholders.
Per Ghana’s tax exemption regime, foreign companies who operate in some regions of the country enjoy a tax-free status while others enjoy holidays for up to 10 years.
The Free Zones Act 504 also provides tax holiday of 10 years for companies operating in areas demarcated as Free Zones, while agro-processing enterprises have an initial five-year tax holiday period among others.
Despite slight amendments to these exemptions in the country’s new income tax law, industry players are pushing for a complete repeal of tax exemptions stating that it does Ghana more harm than good.
Addressing the media on Tuesday, February 2, 2016, after earlier speaking at the opening of a conference on enhanced data for better macro policies in Africa, the Deputy Managing Director of the IMF, Min Zhu said, Ghana must eliminate its tax exemptions.
“We need a further consolidation of the fiscal policy, we needed to ensure that we have primary sectors about 2 percent this year so that we will be able to maintain the debt deficit,”
“By doing that, we need fiscal consolidation we need fiscal sector reforms we need the improved and enhanced tax administrations plus efficiencies, we need eliminating tax exemptions and improve the public expenditure quality.” He stated.
By: Vivian Kai Lokko/citibusinessnews.com/Ghana