Home / General News / Ghana Parliament passes Tax Exemptions Bill 2022

Ghana Parliament passes Tax Exemptions Bill 2022

Share this with more people!

The Parliament of Ghana has passed the Tax Exemptions Bill, 2022 to provide for a tax exemption regime in the country.

The bill, which would set clear eligibility criteria for tax exemptions, would also provide for the monitoring, evaluation and enforcement of exemptions.

Further, the bill would explore delivering a regulatory regime for monitoring tax exemptions to ensure that exemptions granted were used for the intended purposes, as well as control the abuse of the existing exemption regime.

It would strengthen the monitoring role of the Ministry of Finance and Parliament on the management of exemption when assented to by President Nana Addo Dankwa Akufo-Addo.

Mr Ken Ofori-Atta, the Minister of Finance, on Tuesday, July 19, 2022, confirmed to Parliament, that the country lost about GH¢27 billion to tax exemptions granted to some businesses between 2008 and 2020.

He said the amount translated to about GH¢2.2 billion relinquished in tax waivers each year for the 12 years.

According to Mr Ofori-Atta, it was only in 2020 that the lost revenue worsened to about GH¢1.8 billion since 2008.

He said: “It is true, as Ranking Member mentioned, that some GH¢27 billion had been lost to tax exemptions.”

“This brings into focus the need for all of us to protect the public purse. That is an important social re-engineering for us, as we lose revenue on many fronts.

“However, for this year, Ghana will likely make some savings of GH¢460 million on tax exemptions,” he said.

The bill was presented to Parliament on Tuesday, July 5, 2022, and read for the first time by Mr Francis Asenso Boakye, the Minister for Works and Housing on behalf of Mr Ofori-Atta, the Finance Minister.

It was later referred to the Finance Committee of Parliament where they considered the bill under a certificate of urgency.

Going by the Committee’s report on the bill, which was submitted by Mr Kwaku Kwarteng, the Chairman of the Finance committee, it was noted that the biggest threat to Ghana’s domestic revenue mobilisation strategy was exemptions.

“Mr Speaker, it is estimated that Ghana loses about $2.27 billion annually to tax exemptions and if Gnana should continue at this rate, in less than 16 years, Ghana will give more than half of our revenue base away by way of exemptions.

“There is, therefore, the urgent need to pass this bill and halt this alarming trend,” Mr Kwarteng said.

The report added that the committee remarked that the proposed bill sought to establish a monitoring regime to regulate the granting and management of exemption in Ghana.

“The committee noted that monitoring plays a crucial role in ensuring that exemptions and concessions granted are utilised by beneficiaries for the intended purposes to curtail abuse.

“The Bill provides for robust reporting requirements and mechanisms to ensure the efficient and effective use of exemptions,” the report referred to the Deputy Minister for Finance as informing the committee.

According to the report, the committee was informed that tax exemptions created significant difficulties for developing countries and ran counter to the objective of strengthening domestic resource mobilisation.

It is projected that the exemptions for the 2022 financial year are expected to be lowered by about GH¢500 million with the passage of the bill.

Source: GNA

Share this with more people!

Check Also

Ghana-India trade bounces back to $2.7b after COVID-19 slowdown – High Commissioner

Trade between Ghana and India is on the path of recovery after plummeting in 2020 …