Govt to revoke tax exemptions to businesses

Businesses should brace themselves in 2016 as they would be required to pay for some taxes that they are currently being exempted from.

This is because the finance ministry is looking at reviewing these tax exemptions as part of the 2016 budget.

According to analysts, the country loses millions of dollars every year in revenue because of exemptions granted to some businesses.

However with the current challenges facing the economy there is pressure on government by its development partners to review these exemptions.

The country has been facing declines in its export earnings.

The removal of tax exemptions is also to improve revenue collections to help take care of rising expenditure.

Joy Business is learning that some of the areas that not enjoy the tax exemptions from next year include operations of free zones companies.

This means these companies will have to set aside about 25 percent of their profits – from the current 8% -- as taxes to be paid to the state.

Also tax exemptions on raw materials and imported products are expected to be reviewed in the 2016 budget.

Government is also looking at taking away the power given to parliament and the Ghana Investment Promotion Center  (GIPC) to grant tax exemptions to businesses and other state institutions.

This should mean that the finance ministry will hold the sole power to grant exemptions, where it becomes necessary to do so.

However there are fears that the decision to remove tax exemptions might increase the cost of production  for some firms, a development that could also result in prices of goods and services going up.