Some Civil Society Organisations (CSO) operating in the finance, education, extractive and health sectors, have urged the Government to introduce an exit tax policy for multinational corporations which benefit from tax exemptions in the country.
In addition to the exit policy,there should be an annual tax exemption reports, which would provide a comprehensive list of exemptions and obligations of the multinational companies.
That, the CSOs said would help government in tracking the benefits of the exemptions it granted to multinational companies, and gained revenue, when they failed to live up to their expectations.
They made the call at a forum on their expectations for the 2024 budget, having observed that most multinational corporations exit the Ghanaian market after “enjoying’’ tax exemptions, while the country gained little from their activities.
The 2024 budget is expected to be delivered by Mr Ken Ofori-Atta, Finance Minister, on Wednesday, November 15.
“We give exemptions and we don’t know how much the Government is benefitting, which often undermine government’s revenue generation efforts since the profit generated by these companies were not taxed.” Mr Jeffery Ocansey, Executive Director, Revenue Mobilisation Africa, complained.
“We must, therefore, introduce an exit policy to ensure that if tax exemptions don’t achieve the intended objectives, the multinational corporations are compelled to pay tax on profit made during the period of their operations in the country,” he said.
Mr Ocansey explained that often some other African countries granted a better tax exemption than Ghana and “companies that take advantage of it do disclose the reason for their exit.”
“Some of these companies shut their operations after some years because they might have found other countries competitive. If such companies have benefited from tax exemptions, then government must use the exit policy to get taxes from them,” he said.
Dr Alex Ampaabeng, Senior Tax Officer, International Budget Partnership, who advised government on the introduction of a yearly tax exemptions report, said it would be important, knowing the gains and losses arising from the exemptions.
He said the yearly tax exemptions report, a recommendation by the International Monetary Fund (IMF) as a fiscal responsibility measure, “will help us see how much we’re giving away and how much we’re getting in return.”
“In previous years, this has never happened, we give exemptions and we have no idea, how much government is getting back as a reward. Per the IMF programme, the Fund would like to see Ghana producing an exemptions report, possibly next month,” he said.
He advised the Government to implement the tax exemptions report as a domestic revenue mobilisation enhancement measure.
Ahead of the 2024 budget presentation, captains of industry and trade have called for policies and programmes that would maintain economic stability seen in the country in the first two months of 2023, including reduction in taxes.
The Government has pledged that it would be keen on policies that would consolidate the stabilisation gained in 2023 on the back the of current economic crisis, to bring relief to individuals and businesses.
“For the Government, the most important thing is stability–not necessarily going on a drive to acquire liabilities per say, but stability that will give confidence to other investors.” Mr Kojo Oppong Nkrumah, Information Minister told GNA.
GNA
