The Chief Executive of the Ghana Investment Promotion Centre, Yoofi Grant said that the losses made was what led to the scrapping of the current tax exemption regime in the 2017 budget.
He was speaking at a Breakfast meeting organised by the centre on the theme ‘Policy update—Ghana’s Tax Exemption Regime’.
Grant said this was because the policy was implemented in a wrong manner.
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He added that this was what led to the scrapping of the current tax exemption regime in the 2017 budget.
“My numbers stand to be corrected, but I think last year the budgeted amount of exemptions was about GH¢ 800 million but at the end of the day they realised that exemption had built up to GH¢ 2.4 billion.”
“That means there must have been significant abuses of the system and they discovered that truly there were serious abuses in the system. The cost of not checking the abuses means that the good business ends up paying relatively more than they are supposed to and that is a problem,” he added.
Exemption Process at GIPC
Grant explained that the Centre was mandated under section 26 of the GIPC Act to grant import duty and Value Added Tax (VAT) exemptions to qualified companies registered with the Centre.
“A typical approved strategic investment has incentives which include exemptions from the payment of import duty and VAT on plant machinery and equipment specifically for the project, construction materials specifically for the project, and on locally purchased construction materials and equipment required specifically for the project.”
He was quick to call on the stakeholders present at the meeting to share their experiences on the new tax regime. He said this will help the government to take favourable decisions in the sector.
The meeting was attended by the Director of Financial Investment Division at the Ministry of Finance, Samson Akligoh, and the Technical Advisor to the Commissioner General of the Ghana Revenue Authority (GRA), Christian Soti.