The Government has withdrawn the Tax Exemptions Bill 2021, which seeks to prevent a significant loss of government revenue from Parliament.
This is after Deputy Finance Minister John Kuma has sought the leave of the House to withdraw the bill and to re-laid it later in the House.
The Exemptions Bill was laid in Parliament on November 16, 2021, and referred to the Finance Committee of Parliament for consideration.
The Exemptions Bill when passed, is expected to make substantial savings for the Government of Ghana.
For years, experts have attempted to quantify the losses and the depletion to the state coffers occasioned by the unbridled grant of tax waivers.
Moreover, the government itself has estimated that the Exemptions Bill when passed, stands to save GH¢500 million of revenue that otherwise would be lost to tax exemptions in 2019.
This amount is more than the yield of the tax increases that was announced.
“Failure to take action on exemptions is therefore costing the nation dearly and prompting the resort to tax hikes to plug revenue shortfalls,” Mr Kuma said, adding that, the Government also cited for example that in 2011, tax exemptions/tax expenditures cost the nation 6.13 percent of Gross Domestic Product (GDP), translating in US$ 2.4 billion.
In 2013, Ghana lost 5.2 percent of its GDP to tax expenditures amounting to USD$ 2.5 billion, according to the International Monetary Fund.