Parliament is considering a legislation or legal framework to address tax exemptions regime regards the One District One Factory(1D1F) policy aimed at shoring up local revenue.
Parliament passed the Tax Exemptions Bill, 2022 last year to provide for a tax exemption regime in the country.
The current law did not make adequate provisions that addresses the exemptions regime in relation to the 1D1F framework. Government introduced the 1D1F with the objective of boosting industrialisation with varied tax incentives but stakeholders have raised concerns about the excessive exemptions relating the 1D1F framework, which has caused the country several millions in tax reliefs.
Civil society and other pressure groups have raised concerns regards these tax holidays, hence the need for a review of the regime.
The bill, which would set clear eligibility criteria for tax exemptions, would also provide for the monitoring, evaluation and enforcement of exemptions.
Further, the bill would explore delivering a regulatory regime for monitoring tax exemptions to ensure that exemptions granted were used for the intended purposes, as well as control the abuse of the existing exemption regime.
Address the Parliamentary Press Corps in Accra on Wednesday, the Minority Leader, Dr. Ato Forson said parliament has done a lot of work on the tax waivers, pointing out that the exemptions are becoming too much, particularly times like this that the country needs every cedi to save the economy.
According to him, the country cannot continue granting tax exemptions and added that the finance committee has been very adamant in approving tax exemptions, disclosing that parliament worked with the ministry to get the tax exemptions bill passed which culminated in the tax exemptions regime in for the first time.
“In terms of the savings that the finance committee has led parliament to save in terms of tax exemptions, if you quantify it, you will notice we have made huge progress as a country in terms of tax exemptions, there is still lot more we have to do, there is one we working on that has to do with 1D1F tax exemptions, we believe that time has come for us to put brakes on tax exemptions and raise in enough revenue to support the fiscal and the country because we need every revenue to move the country forward, so put it in perspective you will notice the country has made more progress on the tax exemption than before.
I believe in continuous improvement, so we have to continuously identify the gaps we have in the tax exemptions regime and improve it going forward.”
The Majority Leader, Osei-Kyei-Mensah-Bonsu also agreed with Dr.Ato Forson’s view, explaining “It is the reason we have introduced the Tax Exemptions Act, so from now on it is going to be the guiding principle, the difficult now is there are some outstanding imports that were occasioned especially those of them [1D1F] , they are here, the imports have arrived and it was predicated on the old regime, now if you want to benchmark that on the new law, it becomes a difficulty, so you may have to find a way get them out of it and then to make a determination that going forward those of them that have been pushed to the passage of the exemption law would have to be applied, but those already in the system at the instance of 1D1F when there was no such, it becomes difficult to apply the law because you may be applying the law retrospectively, so it is something we have to critically look at.”
It was projected that the exemptions for the 2022 financial year lowered by about GH¢500m with the passage of the bill.
Source: norvanreports.com