Govt pursues abuse of tax exemptions to reduce revenue losses

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    Finance Minister, Ken Ofori Atta has disclosed of plans to pursue institutions and companies that abuse exemptions in the country.

    The position has been necessitated by plans to protect the public purse and curb fiscal slippages that the economy has been facing for sometime now.

    According to him, the value of exemptions had increased from 800 million cedis to 2.4 billion cedis in a very short period.

    Mr. Ofori Atta is also hopeful the move will help government meet its tax revenue target for 2017.

    He made the remarks during the opening session of the National Policy Summit in Accra on Monday.

    “If the state of Ghana in the spirit of improving investments and getting people through has given you exemptions and somehow you have not respected these exemptions to the tune that is now quadrupled, [if] you don’t care about this gift that we have given you, I have to find a way to restrain that,” he argued .

    The Finance Minister added, “I’m losing a billion cedis or two, and so to come back to the ministry and pretend as if it’s my fault when the result is because of what you have done. I think you need honest conversations of industry and the NGO community as to what is really going on.”

    “So I welcome ideas as to how to ensure that those who deserve assumption have it and that if you get it and if you have it you treasure it enough that it is not abused.”

    New tax exemption rules

    The NPP government has as part of efforts to reduce abuse of the country’s tax exemptions introduced a system where businesses make down payments of all tax obligations and subsequently apply for a refund.

    The move which the Finance Ministry is targeted at improving the revenue collection targets has however been described by some tax analysts as illegitimate.

    Tax Analyst, Abdallah Ali Nakyea argues that the government must seek Parliamentary approval in order to carry out such mandate.

    We will build economy to protect local businesses

    Speaking at the same event, the Finance Minister reiterated his resolve to create sound economic policies that will favour growth of local businesses.

    The President of the Association of Ghana Industries, AGI, James Asare Adjei expressed concern at the undue competition offered by foreign businesses.

    Mr. Adjei cited the high interest rates, cedi depreciation among others as persistent challenges facing the industry.

    But Mr. Ofori Atta is confident the economic policies would be to the advantage of local businesses.

    “There should be no apologies about a preference that the world knows that we are going to be biased towards our companies within the framework of whatever we have. I think that boldness should come, we should be clear about that and when we were even talking to the Millennium Challenge Account, the cabinet and the presidency went back and said unless it is majority Ghanaian owned for the concession, we are not taking it.”

    Source: citibusinessnews

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