Undue delays in approving tax waivers hurting industry – Trade Committee Chair cries

tax waivers 1D1F initiative

Chairperson of the Trade Committee in Parliament, Carlos Kingsley Ahenkorah, is concerned over the delay in approving tax waivers to companies under the One District-One Factory (1D1F) initiative by parliament.

The situation, he lamented, has driven some investors out of the country – a case he described as ‘worrying and killing industry’.

Mr. Ahenkorah made these remarks on the floor of parliament following presentation of the business statement for next week.

“This House has deferred exemptions for One District-One Factory since 2021, which are still outstanding. We are going on another long recess, and there doesn’t seem to be any light at the end of the tunnel for these 1D1F companies. It is very interesting to note that because of such delays and hindrances, some industries are moving away from Ghana.

“It is becoming a bit worrying, if not too worrying – especially on the part of the trade committee which is bombarded by these complaints from 1D1F companies almost on a daily basis.”

The lawmaker’s outburst stemmed from the fact that parliament failed to consider the waivers before recess, which is scheduled for next week.

There are currently some 150 tax exemptions of companies outstanding that were brought before the House and later referred to the committee for consideration to ensure that exemptions are awarded on merit.

But Chairman of the Trade Committee and MP for Obuasi West, Kwaku Agyemang Kwarteng, insisted that two years is too long a time to keep companies and investors waiting to be granted waivers before executing their projects.

He lamented the cost that these companies will incur on demurrage and freights at the ports.

“The finance committee has had that referral since 2021. Up till now, up till now nothing is happening. It is very funny for anybody to import containers into this country and let it sit in the ports for two years, paying demurrage and port freight.

“Are you telling me that any investor in this country who has borrowed money from the bank should sit down for two years before they get the exemption to clear their goods from the ports? What are you doing to industry? You are killing industry,” he said.

He added: “Government only has exclusive rights over the duties there on the cargo, but not the rent of containers on the real estate space that they occupy – the container proper which belongs to the shipping line that is supposed to use it to move cargo back and forth,” he said, urging the House to as a matter of urgency include the matter in the week’s agenda to be considered before the House rises.

Contributing to the matter, Minority leader Cassiel Ato Forson noted it is not true that the finance committee has deliberately declined to consider the matter.

“It is wrong for you to think that the finance committee has failed to sit on the referral. We sat on it and we brought it to this House. This House rejected those referrals and asked the finance committee of which I am a member to re-look and do further research into the matter, and that is why we have not been able to present the report yet.

“We are talking about 150 tax exemptions for companies amounting to billions of cedis,” the Minority leader stated.

In support of the claim, MP for Adaklu Kwame Governs Agbodza also intimated it is the case that the committee is deliberately stifling the passage of tax waivers.

According to him, tax waivers are not to be given just because people are demanding them, but must be granted based on merit.

“Let me remind you that we have granted tax waivers to many companies which are actually not doing anything; so encouraging us to give tax waivers just because the people have demanded them is not right,” he further stated.

The economy lost GH¢27billion to tax exemptions between 2008 and 2020, leading to passage of the Tax Exemptions bill last July. It provides for a tax exemption regime in the country with defined criteria for exemptions, and was expected to save the economy GH¢460million in 2022 according to Minister of Finance Ken Ofori-Atta.

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