President Nana Addo Dankwa Akufo-Addo has identified tax exemptions as the bane of Ghana’s development.
According to him, if state agencies are unable to collect taxes and the tax exemption regime is allowed to thrive, in less than 16 years, half of Ghana’s revenue base will be given away through tax exemptions.
Delivering his third state of the nation address in parliament on Thursday, 21 February 2019, Nana Akufo-Addo said: “Revenue mobilisation poses the biggest challenge in the management of our economies with the tax exemption policy, in particular, proving to be an Achilles’ heel and a growing menace to fiscal stability and revenue generation.
“In the last eight years, tax exemptions in respect of import duties, import VAT, import NHIL and domestic VAT have grown from GHS392 million, that is 0.6 per cent of DGDP in 2010 to GHS4.6 billion; that is 1.6 per cent of GDP in 2018.
“These figures do not include exemption from the payment of corporate and individual income taxes, concessions, petroleum tax reliefs, customs tax exemptions enjoyed by diplomatic missions and waivers on processing charges at the ports.
“If we continue at this rate, in less than 16 years, half of Ghana’s revenue base will be given away as tax exemptions.
“Mr Speaker, this is not sustainable and we intend to do something about it to reverse the trend by introducing sustainable measures that may disrupt the easy comfortable arrangements that many have become accustomed to but which we have to take to ensure that we have the firmness of foundation for the economic takeoff that has escaped us for long.”
Source: Classfmonline.com
