By Ernest Bako WUBONTO
Chief Executive Officer-Ghana Investment Promotion Authority (GIPC), Yofi Grant, has raised concerns about the harassment of foreign-owned businesses by tax officers from Ghana Revenue Authority (GRA).
He lamented that on a daily basis at least three to five foreign-owned businesses visit the GIPC office – a state entity mandated to market and promote investments opportunities to both local and foreign investors – to complain about constant harassment due to varying tax charges and policies
Speaking as a panellist at the Canada-Ghana Chamber of Commerce (CANCHAM), Mr. Grant warned that the constant harassment, combined with investor concerns such as unfavourable tax policies, exchange rate fluctuations and inflation, has become a major impediment to existing businesses in the country.
At this rate, the GIPC boss said, it has great potential to undermine the economy’s attractiveness as an investment destination.
This is particularly worrying, as foreign direct investments to Africa have reduced significantly post COVID-19.
“The GIPC is concerned about the negative impact of tax harassment on foreign investors’ confidence in the Ghanaian economy. We urge the GRA to address these concerns and ensure a more conducive business environment for all investors,” he appealed.
The GIPC CEO advocated a collaborative approach to resolving tax-related issues, ensuring that investors receive fair treatment and promoting a stable business environment.
Mr. Grant’s appeal is timely. The domestic economic landscape has been significantly impacted by tax policies implemented since 2017. Investors and businesses are grappling with high interest rates on loans from financial institutions, local currency volatility and high inflation – along with other nuisance taxes that hinder business growth and sustainability.
High taxes lead to decreased consumer spending and business investment, which in turn can result in lower overall economic activity. This decrease can dampen economic growth, reducing the total tax revenue collected by government.
How economic climate forced out multinationals
Addressing the impact of tax harassment and other tax policy implications, the GIPC CEO highlighted that the recent trend of multinational brands like Glovo, Nivea, Game, Jumia Food and Unilever exiting the market can be attributed to the country’s unfavourable economic climate.
“Post COVID-19, Ghana’s unstable economic situation has forced numerous international corporations to move all or a portion of their operations to our neighbouring countries, especially Cote d’Ivoire. Notwithstanding the country’s abundance of natural resources and generally stable political climate, several economic difficulties have resulted in the departure of some industries’ important players,” he said.
The cedi’s fluctuating value has significantly impacted profit margins, especially for businesses that depend on imports of raw materials for production.
The panel, while acknowledging the high business operating costs and taxation, urged foreign investors to familiarise themselves with the various tax regulations and ensure all their operations are within remits of the law.
The GRA was also urged to find innovative ways of collecting outstanding taxes from businesses without regularly showing up at their doorsteps.
