The Ghana Union of Traders’ Association (GUTA) has once again underscored the need for government to review the tax exemption regime to curtail revenue losses, as the Minister of Finance, Ken Ofori-Atta prepares to present the Mid-Year Budget Review on the 13th of July.
According to the Association, there is a lack of urgency in the way the exemption bill is being treated despite indications that the government’s latest revenue generation strategy, the electronic transfer levy, is woefully failing to meet government targets.
The presentation of the Mid-Year budget review by the Minister of Finance comes as Ghana prepares to seek some economic assistance from the International Monetary Fund.
Speaking in an interview with Citi Business News, President of GUTA, Dr. Joseph Obeng noted that government should review some taxes and introduce measures to control the dominance of foreigners in the import space.
“We find it difficult to understand why they are still not being able to revise the tax exemption policy. It is not helping anybody, including the government. We need taxes to grow, and the tax exemption policy has not helped. If anything, it has not helped to create employment. This tax exemption is going to help foreigners. What do we have to show if it doesn’t reflect on employment creation? It needs to be looked at as soon as possible, especially as government is going to the IMF program. They should rethink through and do something about it,” he said.
The call by GUTA follows calls by many stakeholders to government to put in place measures to ensure the State is not deprived of billions of cedis, through tax exemptions every year.
The Tax Exemptions Bill was laid in Parliament in the first quarter of 2019 to, among other things, “rationalise the current exemptions regime on taxes, levies, fees and charges by varying, where necessary, and consolidating existing statutory provisions on tax and other exemptions and to provide for the administration of exemptions”.
But since then, nothing has been done. In November last year, the Minister of State at the Ministry of Finance, Charles Adu Boahen, announced that plans were far advanced for the passage of the Tax Exemptions Bill.
According to him, Cabinet is deliberating on the final draft of the Bill.
Already, data from the Institute for Economic Affairs (IEA), shows that Ghana loses over GHC 5 billion every year through tax exemptions alone.