The majority in parliament has questioned the basis for the opposition of tax waiver requests for 42 companies under the 1D1F policy by the minority.
The waivers totaling $350 million have been outstanding in parliament for years now following stiff opposition from the NDC minority.
The NDC MPs led by their leader Dr. Cassiel Ato Forson argues granting such exemptions is untenable given the economic crisis the country finds itself in which has compelled the government to resort to the IMF for a bailout.
However addressing the media in parliament, majority leader Alexander Kwamena Afenyo-Markin related to exemptions granted under the Mahama administration with Dr. Forson as deputy finance minister.
According to the Effutu MP, the over $800 million waiver granted Meridian Port Services, MPS, there were many others granted by former President Mahama without parliamentary approval.
“The most outrageous tax giveaway ever seen in Ghana was handed to Meridian Port Services in 2016 by the Mahama-led Administration.
“At the time, the NDC government applied to Parliament for a tax waiver of USD982M for a project that they claimed cost USD1.5B. It took the intervention of the minority NPP members of the Finance Committee, of which I was a member at the time, to lower the waiver amount to USD832M. Even though that was still unacceptable, the NDC majority goaded on by the Terkper-Ato Forson-Mona Quartey Ministry of Finance railroaded the request through Parliament.”
“Folks, for every USD1 that MPS invested in the project, GoG gave them 55 cents in tax waivers. Fa no kwa!
Specifically, MPS was exempt from corporate income tax for 10 years and a reduced corporate tax of 15 percent after 10 years for an additional five years. MPS was also excluded from paying taxes on dividends to shareholders for 20 years.
The concession also covered Value Added Taxes, NHIL, customs duties, and withholding taxes, amongst others.
This foreign company is still enjoying all these freebies as we turn a blind eye to Ghanaian businesses.”
According to the majority leader, the beneficiaries of the unconstitutional tax waivers granted by the NDC administration included Dzata Cement.
“Ladies and gentlemen, what was even unconstitutional, illegal, and immoral was the designation of some companies as strategic investors by GIPC and the granting of tax waivers without recourse to Parliament.
President Mahama singlehandedly sat in his office and approved tax waivers in 2015 for the so-called strategic investors. Conspicuous on the list of beneficiaries were:
Dream Reality Ltd
Dzata Cement
Shop rite Ghana
Ecobank
Garden City Mall
Ghacem Ltd
Vincien Sugar Refinery Ghana Ltd
Boston Investments LTD
Dream Realty Ltd
Ciments De L’Afrique Ghana Ltd.”
The others are:
“Wilmar Africa Ltd.
West Hills Mall Ltd.
Tang Palace Hotel Ltd.
Mabani Seven Company Ltd.
Sunon Asogli Power Ltd.
Quantum Power Ghana Gas Ltd.” He revealed.
Afenyo-Markin contrasted what happened under the Mahama administration to what the government is seeking to do now which is to stimulate growth for job creation through industrialization. According to him the conditions in the waivers for the 1D1F policy are much better and thus do not shortchange the country in any way
“Now, fast forward to the tax waivers for 1D1F companies currently before Parliament. This is an incentive package for the flagship policy. The waivers last for only five years as approved by Parliament in May 2019. The government is only seeking to extend the incentive package to other companies. The growth seen in the industry sector of the economy is partly attributable to the 1D1F policy. It is creating jobs. It is boosting economic growth.”
He wondered why the same incentives granted to foreign companies cannot be extended to indigenous entities as well.
“So, if we did it for a foreign entity, why don’t we extend the same to indigenous businesses who are not benefitting as much as MPS?” He queried
Parliament is expected to consider these tax waivers when the house reconvenes in the coming days. Speaker of Parliament Alban Bagbin before the house rose after the emergency recall directed the finance committee to finalize its report on the exemptions before the house returns.
Source: Ghana/Starrfm.com.gh/103.5FM/Ibrahim Alhassan
