Parliament suspends approval of $24m tax waiver

Parliament has deferred the approval of a tax waiver of US$23,983,033, being a tax waiver on materials, plant, machinery, and equipment by Platinum Properties Limited.

Parliament

The materials would be used for the Pullman Accra Airport City Hotel and Serviced Apartment.

It has, however, been put on hold for further discussion.

According to the First Deputy Speaker, Joseph Osei-Owusu, the decision to defer a vote on the matter was due to the lack of quorum in the House.

"My attention has been drawn to the fact that we do not have sufficient numbers, that is 50 percent or more to make a decision and so the decision is deferred," he said.

Joseph Osei-Owusu ruled after both the Minority and the Majority had argued over whether Platinum Properties Limited qualified as a strategic investor to be granted the waiver of import duties, import VAT, import National Health Insurance Scheme (NHIS), import GETFund levy, domestic VAT, domestic NHIL and domestic GETFund levy on materials, plant and machinery and equipment it would procure.

NDC MPs disagree

The Minority in Parliament said the government's decision to grant a tax waiver of US$23.9 million dollars to Platinum Properties Limited under the GIPC Act 2013(Act 865) is undefendable.

According to the minority, the company which is undertaking the Pullman Accra Airport City Project does not deserve the tax exemption because the funding from the project is locally sourced, hence does not qualify as a Foreign Direct Investment (FDI).

"The 75 percent debt that will be used for the project amounting to about 94.5 million dollars will be funded by Ghanaian banks, in essence, the debt amount of 94.5 million dollars will be drawn from Ghana's economy," a letter signed by Ranking Member of the Finance Committee, Cassiel Ato Forson said.

They stated that as far as the minority is concerned, the only information available to them was that the 25 percent equity component of the project amounting to about 31.5 million dollars will be funded by the Ghana Infrastructure and Investment Fund to the tune of 13 million dollars representing 41 percent while the sponsor, one Dr. Kwame Nyantakyi-Owusu will contribute 18. 5 million dollars, 59 percent.

The entire equity of 31.5 million dollars does not meet the minimum requirement of 50 million dollars for a strategic investor status for tax purposes," the letter stated, adding that "Dr. Kwame Nyantakyi-Owusu who is the sponsor is contributing only 18.5 million dollars, which clearly does not meet the 50 million dollars threshold as strategic investor under the GIPC Act".

Raising more concerns, the Minority maintained that they are unable to determine the list of items contained in the assessor’s list, therefore, they are to be exempted under the request for the project in question.

The Minority stated that it cannot on this basis recommend approval of the waiver.

JOIN OUR PULSE COMMUNITY!

Unblock notifications in browser settings.

Eyewitness? Submit your stories now via social or:

Email: eyewitness@pulse.com.gh