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Business News of Tuesday, 27 October 2015

Source: Graphic.com.gh

GPHA seeks tax waivers

The Ghana Ports and Harbours Authority (GPHA) is set to obtain parliamentary approval through the National Budget and Economic Policy of the government for tax waivers on some of its operational areas.

The waivers are expected to cushion the authority against some of the concessions it gives to state agencies and essential services which use the services of the harbour.

While the concessions it offers the agencies sap its revenues, the tax waivers would serve as buffers which could be reinvested to improve port operations through expansion of infrastructure and modernisation.

The Director General of the GPHA, Mr Richard Anamoo, said the appeal was to enable the port authority to cover part of the revenues it lost to concessions offered other state institutions, especially essential services and agencies that provided public goods without necessarily making profit.

For instance, the agricultural sector enjoys waivers on rent and port handling charges on products such as fertilisers and tractors. The security services also enjoy similar services from the port authority.

It, therefore, makes fiscal sense to enable the port authority to enjoy certain tax waivers, at least on the equipment that it uses directly on port handling.

Response to tax waivers

A Deputy Minister of Finance, Mr Cassiel Ato Forson, said the appeal for tax waivers could be looked at considering that the government gave such tax waivers and holidays to foreign investors.

“As government we are very much aware of the challenges that you are going through. If we give tax exemptions to some of the foreign investors, why can’t we do the same for GPHA. But it should be done in a way that the country does not suffer,” Mr Forson said.

Essentially, the government’s position is that tax exemptions should not cost the nation more than it derives from the activities of the entity enjoying it. For instance, it would not make fiscal sense to grant a GH¢50 million worth of exemption in return for about GH¢10 million dividend.

Taxes and port expansion

In spite of the concessions and the massive investments to expand port infrastructure to clear congestions, Mr Anamoo said the authority paid all taxes and duties for all equipment it imported into the port, including re-stackers and mobile harbour cranes just as any individual or private sector entity.

The port authority is also embarking on an ambitious US$450 million rehabilitation and expansion of the Takoradi Port. The first phase of the project was more than 80 per cent complete, according to Mr Anamoo, with milestones such as the completion of the main breakwater. The lead breakwater is being worked on currently.

The project included the reclamation and redevelopment of the old log pond into an oil services facility to support the country’s offshore oil production.

Other works are the dredging, paving works in the harbour, the construction of quay walls of 500 metres, construction of cocoa shed outside the harbour premises as well as the construction of an oil berth of depth 650 metres and so on.

“The quay wall has started surfacing and we are still on track to finish the work by April/May next year. Hopefully we should have started phase two,” the GPHA director-general explained in response to a question the GRAPHIC BUSINESS posed to him.

This was shortly after the GPHA had presented a cheque for GH¢4 million to the Ministry of Finance as dividend with respect to 2014. The last time the port authority paid dividend to the state was in 2009. The officials explained it was because the authority had to reinvest profits in projects to improve services at the port.

GPHA earlier this year signed a concession agreement with the Meridian Port Services Ltd (MPS) to expand the port and modernise operations at the cost of US$1.5 billion to be completed in four years.

Mr Anamoo said the project was still going through fine-tuning, particularly due to its complex nature and the volume of materials involved in the project execution. Places to source materials such as rocks, laterite and sand were all being considered. This will include the means of transporting the materials faster to the construction site in Tema.

“A lot of behind the scene works are going on. Contractors have been invited for tenders and evaluation is being done. We are working towards the end of this year so we can start construction work by the first quarter of next year,” he stated.