A tax consultant and also a Senior Lecturer Dr Abdallah Ali-Nakyea, has said not all businesses in the country need tax exemptions from the Government.
According to Dr Ali-Nakyea, some businesses in the country don’t need tax exemptions as they will grow with or without it.
“Before you invest in a business, you do feasibility studies, you have a business plan and so you know when you will break-even and make profit. So at what point does tax exemptions or incentives come in your evaluation or planning. So its only an added benefit to ensure that you are able to take-off, so if you don’t require it, why should it be given,” he quizzed.
He made the assertion in reference to the Tax Exemption Bill currently under considerations by Parliament, during an interview with norvanreports on the sidelines of the 8th Pan African Conference on Illicit Financial Flows and Taxation themed; The Ghana We Want Post COVID-19: Optimizing Domestic Revenue Mobilization (DRM) from the Extractive Sector for Ghana’s Transformation.
Speaking to norvanreports, he noted that the tax exemptions by Government were not bad, but what does Government and the country at large stand to benefit from giving tax exemptions.
“Tax exemptions since 2012 has grown from 0.82 per cent of GDP to a little less than 2 per cent of GDP at the moment, and the idea is that if we are giving these incentives, what do we intend to get by giving it, what are we getting in return,” he quizzed.
Dr Ali-Nakyea opined that, there should be a review or cancellation of tax exemptions for companies that fail to bring to Government and the country at large, the expected benefits of being given tax exemptions.
“For instance companies in the Free Zone enclave have been given 10 years of tax holiday and the reason is for technological transfer and to increase exports to 70 per cent of production to earn the country foreign exchange, so if the country is not getting the needed foreign exchange and as a result our foreign exchange is in trouble, then which firms are not bringing it in and do we need to review their tax exemptions or cancel them,” he intimated.
Data available shows that between 2010 and 2018, the total amount of tax exemptions granted by the Ghanaian Government was in excess of Ghs 4.6 billion.
High tax exemptions have been identified as one of the major contributing factors to Ghana’s poor domestic revenue mobilization efforts.
Dr Ali-Nakyea was the keynote speaker at the 8th Pan African Conference on Illicit Financial Flows and Taxation organized by the Ghana Integrity Initiative (GII) and the Integrated Social Development Centre (ISODEC) with funding support from Diakonia and Tax Justice Network Africa.