Millions to Dzata Cement, $882m to MPS: Majority lists ‘unconstitutional’ tax waivers approved by Mahama’s government

The Majority Caucus of Parliament has called out the Minority Caucus over its opposition to some tax waivers the Nana Addo Dankwa Akufo-Addo government is seeking for some private companies in the country.

Speaking to the media at parliament on Thursday, May 30, 2024, the Majority Leader, Alexander Kwamina Afenyo-Markin, indicated that the Minority Caucus, led by Dr Cassiel Ato Forson, is being hypocritical with their opposition to the tax waivers.

He said that Dr Ato Forson, when he was Deputy Minister of Finance during the John Dramani Mahama administration, justified the granting of tax waivers but is saying today that the reasons he gave then are no longer applicable.

“I don’t know whether the argument of yesterday has changed today. In parliament, Dr Forson, deputy finance minister as he then was, said that ‘the tax incentives were not merely considered for the sake of being granted, but that such exemptions were necessary. If the incentives were not granted, it would result in those investments relocating to other countries.’

“He (Ato Forson) further stressed ‘that tax exemptions should be evaluated not only on revenue decisions but on their economic impact.’ What has changed? I’m not an economist. My respected colleague, the Minority Leader, is the one who has done economics. He’s a tax expert. His argument then was that we should not only look at the revenue, we should look at the economic impact.”

The Majority Leader added, “Why has he conveniently chosen to stay away from his own argument, which argument is to the effect that when you grant a tax waiver, it helps the economy because the private sector person who is having access to this surplus liquidity would reinvest.”

Afenyo-Markin then went on to list some of the tax waivers granted by the then John Dramani Mahama administration, which he said were granted even without the approval of parliament, adding the reasons the then government gave for approving those waivers.

The companies he mentioned included Dzata Cement, a company owned by the former president’s brother, Ibrahim Mahama; and MPS, which he said were given tax waivers worth over $800 million.

“Dzata Cement was a company that benefited from this unconstitutional illegal tax incentive. We did not complain because we were told that Dzata Cement was a strategic investor. It did not even come to Parliament. Huge sums of money; huge! because they said Dzata Cement was a strategic investor.”

“Another company called Dream Reality, with close connections to the government at the time. Boston Investment – we don’t know what they were doing, they were also granted tax waivers without parliamentary approval.”

He added, “Dr Forson told us that if Ghana did not approve the $882 million to MPS, MPS would relocate to Ivory Coast or some other countries.”

Background:

The Minority Caucus of Parliament, during proceedings on May 17, 2024, opposed the approval of tax waivers worth $334 million the government was seeking for 42 private companies.

The MP for South Dayi, Rockson-Nelson Dafeamekpor, shared images of a supposed document from parliament, titled “Order Paper for the Emergency Sitting of Parliament,” dated “Friday, May 17, 2024,” which showed the list of companies being granted the tax waivers.

One of the entities on the list was Santuo Oil Refinery, which the government was seeking to grant $164.6 million in tax waivers.

Source: GhanaWeb