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Business News of Monday, 15 June 2020


Parliamentary Minority demands policy on tax waivers

Ken Ofori-Atta, Finance Minister Ken Ofori-Atta, Finance Minister

The Minority in Parliament is requesting that the Ministry of Finance presents a policy on tax waivers to the House, to enable proper decision on matters of granting waivers.

The Minority has expressed concern about the large amount of money that is foregone through tax waivers to companies and institutions which could have been used for development.

Deputy Minority Leader, Dr James Klutse Avedzi, said it was long overdue for the Finance Ministry to bring a policy to Parliament for consideration as had been earlier promised by Finance Minister, Ken Ofori-Atta.

“We have raised these issues several times. We don’t know what is happening about this policy,” he said.

He added, “If we have a policy on how to handle waivers, we will then know how to go about it. We do not know whether what we contribute here or debate on the floor of the House is taken on board by the Finance Ministry whenever they are doing their negotiations for loan agreements,” he said.

Parliament has approved a request to waive Domestic VAT totaling US$3.1 million on local purchases and services in the rehabilitation and upgrading of equipment in Technical Universities, Polytechnics and Technical and Vocational Training Centres.

The request for the VAT exemption complies with the Concessional Loan Agreement between the Government of Ghana and the Export-Import Bank of China.

Chairman of the Finance Committee Dr Mark Assibey-Yeboah, presenting the Committee’s report on the floor Parliament indicated that Parliament had in July 2018 approved by a resolution the Supplementary Contract Agreement Nos. 1&2 as well as the Commercial Contract between the Government of Ghana, acting through the Ministry of Education and Messrs AVIC International Holding Corporation of China for the implementation of the project.

Following that, the House 5th April 2019, approved by resolution the request for the waiver of Import Duties, VAT, GETFund, Import NHIL, Special Import Levy, EXIM Levy, AU and ECOWAS levies amounting to US$26,966,083 on project materials and equipment to be procured under the Polytechnic, Technical and Vocational Training Centres upgrading project.

He said the resolution for the tax exemption approved by Parliament covered only imports contrary to Clause 2 of the Supplementary No1 of the Commercial Contract Agreement.

He said the present request thus seeks to include Domestic VAT on local purchases and services in the taxes to be waived in connection with the project.

The project aims to rehabilitate and upgrade the facilities and equipment of Technical Universities, Polytechnics and Technical and Vocational Training Centres in Ghana.

It is also to improve the employability of Ghanaian youth by providing them with the relevant skills and competencies required for self and formal employment.