Even though the 7th Parliament failed to pass the proposed Tax Exemptions Bill 2019 into law there is another opportunity for the House to correct that following the reintroduction of the document to the…
Among others, the Bill when passed would ensure that unregulated and incalculable tax incentives from the state to politically favored business operators and individuals are drastically controlled if not eliminated.
Available data indicates revealed that total amount of tax exemptions granted by the Ghanaian government in eight years (between 2010 and 2018) was far in excess of GHc 4 billion. It is estimated that about $1 billion to $3 billion is lost to tax exemptions in Ghana annually.
Further, about 2 to 5 percent of Ghana’s Gross Domestic Product (GDP) is lost through the granting of tax exemptions to businesses that do not really contribute significantly to the country’s economic fortunes.
High tax exemption rates have been identified as a major contributing factor to poor domestic revenue collection, among others.
Notwithstanding the fact that there were attempts to restructure the tax exemptions regime in Ghana in 2019, the absence of specific legislation has made this an extremely difficult task. This could explain why stakeholders got excited when a Tax Exemption Bill was introduced in Parliament in that year. However, the excitement was short-lived as the House failed to take advantage of the situation to make the law a reality.
According to a tax advocate – Bernard Anaba, the Tax Exemptions Bill will bring together the various legislation on tax exemptions in the country into a solid document and guarantee consistency, standardization and correct monitoring for proper application and maximize the use of the incentives in the right areas of the economy.
Though the 7th Parliament missed the opportunity to pass an important Bill such as the Tax Exemptions Bill, that cannot be the end of the story. The Speaker Alban Sumana Bagbin led 8th parliament has a fresh opportunity to ensure the passage of this law, especially now that it has been resubmitted to the House for consideration. The passage of this Bill must be speedily so as to prevent the continuous misapplication of taxes and also ensure that the tax payer’s money is adequately protected.
Some experts on tax issues in Ghana have actually emphasized the need for Parliament to prioritize the Bill in the national interest.
A lecturer at the University of Ghana Law School, Dr. Abdallah Ali-Nakyea, who is also a director at Ali-Nakyea & Associates, has said that the speedy passage of this Bill into law will save the country a lot of money which can be used in developing other aspects of the country.
“…when there is a law, you must meet the requirement or the provisions of the law,” he stated in an interview.
Will Parliament take the opportunity and save the country some revenue for national development? We await the good news.
By Jeorge Wilson Kingson || ghananewsonline.com.gh