Parliament has passed the Tax Exemptions Bill 2022 to streamline the tax exemption regime in the country.
The Bill, among other things, comprises tax waivers given to local and foreign companies to encourage increased investment and more foreign direct investment in the economy.
When assented to by the President, the Tax Exemptions Bill will strengthen the monitoring role of the Ministry of Finance and Parliament on the management of exemptions.
Also, it will seek to provide a regulatory regime for monitoring tax exemptions to ensure that exemptions granted are used for the intended purposes, as well curtail the abuse of the existing exemption regime.
It is projected that with the passage of the bill, exemptions for the 2022 financial year will be lowered by about GH¢500 million.
Many stakeholders, including the Association of Ghana Industries and Ghana Union of Traders Associations, have for years pushed for government to put in place measures to ensure the state is not deprived of billions of cedis, especially through tax exemptions.
Fiscal policy specialist with Oxfam Ghana, Dr. Alex Ampaabeng welcomed the passage of the bill.
“This is a very welcoming news. We don’t really have a way to streamline tax exemptions in Ghana. The exemptions which can be granted are part of strategic exemptions coming from the Executive arm. We can also have some negotiated also on behalf of the government by GIPC. So there are so many ways businesses coming to Ghana could go about it getting exempt granted and the Bill will help out with that.”
Dr. Ampaabeng further urged the government to be accountable for the taxes exempted in the year.
“I hope this doesn’t become just one of those paper works. It should be a document that should be followed through. Just as we report on our debt situation, I hope that the Finance Minister will be reporting periodically on the exemptions that we have given out and be able to tell what we got back in return. We can also use the period to assess which exemptions have to be continued or modified or abolished. I hope next year by now, we should be in a better position to assess all these.”