Tax Exemption Bill: Here is another opportunity for Parliament to pass it

The 7^th Parliament of Ghana came to a successful end recently but the House failed to pass into law a very important Bill – the Tax Exemption Bill that was laid before it in 2018 by the Minster of Finance for consideration.

Among others, the Bill when passed would have ensured that unregulated and incalculable tax incentives from the state to politically favored business operators and individuals are drastically reduced or controlled.

According to available data, 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. Currently, it has been estimated that about $1 billion to $3 billion is lost to tax exemptions in Ghana annually.

Also, 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.

Subsequently, high tax exemption rates have been identified as a major contributing factor to poor domestic revenue collection, among others.

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Despite the fact that in the year 2019, there were attempts to restructure the tax exemptions regime in Ghana, the absence of specific legislation has made this an extremely difficult task. This perhaps was why stakeholders got excited when a Tax Exemption Bill was introduced in Parliament. However, the excitement was short-lived as the House failed to take advantage of the situation to make the law a reality.

In an interview, a tax advocate – Bernard Anaba, hinted that the Tax Exemption Bill would have brought together the various legislations 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 7^th Parliament missed the opportunity to pass the Bill into law it is not all that blue. The Speaker Alban Sumana Bagbin led 8^th parliament has a fresh opportunity to bring the law back and pass it speedily so as to prevent the continuous misapplication of taxes and also ensure that the tax payer’s money is adequately protected.

To ensure this, it is important that the Tax Exemption Bill is reintroduced in the 8^th Parliament for the speedy consideration of the MPs in the interest of Ghana. Some experts on tax issues in Ghana have actually highlighted the need for Parliament to prioritize the Bill in the national interest.

According to a lecturer at the University of Ghana Law School, Dr. Abdallah Ali-Nakyea, who is also a director at Ali-Nakyea & Associates, such a move by Parliament 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.

Bernard Anaba on his side wondered why the government and especially the Minister of Finance, Ken Ofori Atta, who was instrumental in formulation of the Bill and was behind its facilitation to Parliament did not pursue it with same aggression to ensure that it was passed before the eventual death of the last parliament.

“…there are various interest groups which may not necessarily be happy with such a Bill which seeks to rationalize the Tax Exemption regime,” he stated while urging the new government and the 8^th parliament to collaborate and make history by ensuring that such an important bill is prioritized, presented and passed into law immediately in the National Interest.

By Jeorge Wilson Kingson || ghananewsonline.com.gh