Gov’t to introduce new tax policies
“We intend to present to parliament a package of tax policy measures at the time of the mid-year budget review to ensure sustained funding for our key programmes,” said the Finance Minister, Ken Ofori-Atta.
The government also plans to review its process for granting corporate tax exemptions to mining and oil companies as part of measures to eliminate fraud and boost revenues.
“Improper accounting of resources on the part of concessionaires is a major source of revenue loss and it is for this reason that we are reviewing the exemption process,” he told a meeting of donors and Ghana tax and customs agencies in the capital Accra.
Last month the International Monetary Fund called on Ghana – Africa’s second biggest gold producer and a nascent crude exporter – to adopt additional measures to boost revenues.
Official data was not immediately available on the volume of tax exemptions claimed by companies in the resources sector. However, Finance Ministry data seen by Reuters showed that Ghana granted a cumulative GHC3.0 billion (US$678 million) in tax exemptions last year.
“Our experience is that these costs that some mining companies actually incur are really a black box. They are not transparent. We don’t really know,” Bawumia said.
Mining companies operating in Ghana include South Africa’s Anglogold Ashanti, Asanko Gold and Newmont Mining while oil production is dominated by London-listed Tullow Oil and Kosmos Energy.
There are fears that looking at the current challenges facing the economy, the government may struggle to secure the almost GH¢40 billion tax revenue for this year.
Additionally, speaking at the Ghana beyond Aid conference, Mr Ofori Atta said he is hopeful this challenge would be addressed when he presents the Mid-Year review in July.
This policy document would give fine details on how to deal with the revenue challenges facing the economy.
“As you recall, in the 2017 budget we were clear in a preferential option for the poor as under grading the pace of development and also vibrant private sector free from the cohesive state.
Education now is funded more robustly, NHIS is stronger, Teachers and Nurses allowances have been reinstated,” he said.
Mr Ofori-Atta added, “It is essential that we mobilize more revenue in other to ensure that our priority programmes are well funded.”
It is however not clear for now, whether the expected review by the finance minister could result in tax increases or just implementing additional measures to ensure compliance among the working class in the country.