Stakeholders in Ghana’s capital market will heave a sigh of relief as the government considers the restoration of market incentives to boost investor confidence.
The Minister of Finance, Ken Ofori Atta speaking to a cross-section of the media in Accra said the capital gains tax, which makes investment on the exchange unattractive, was part of the nuisance taxes that government was considering to review.
The introduction of the Income Tax Act 2015 by the previous government took away all tax incentives that were in place to make the capital market attractive to investors.
The incentives included capital gains tax exempt status for listed securities, a three per cent rebate that companies listing on the Ghana Stock Exchange (GSE) enjoy for the first three years and the GSE’s own corporate tax exempt status even though the GSE is a company limited by guarantee.
Mr. Ofori-Atta said the issue of nuisance taxes would be addressed in the 2017 budget expected to be presented to parliament in March.
The minister painted a positive outlook for the economy this year, despite the difficult challenges that the new government had inherited.
“We are hopeful because we believe that we can restore policy credibility, and we would be able to enforce the public financial management act to restore the discipline that is required to stabilise the economy,” he said.
The new government, he said, inherited a budget deficit of about 10 per cent more than the 5.3 per cent that was agreed with the International Monetary Fund (IMF).
He attributed the increase in budget deficit partly to revenue shortfalls, arrears and claims, fiscal overruns due to the December elections.
Mr. Ofori-Atta said the new administration was undertaking an audit of the economy it inherited in order to fully determine the real state of the economy.
He said his administration would ensure fiscal discipline by keeping an eagle eye on expenditure and also expand the tax base.
The minister said the government was committed to the IMF programme but stated that the new government would open discussions with the IMF to review it to create fiscal space for the government.
Mr. Ofori-Atta said the government was aware of the major role that the Chinese government played in Ghana’s economic and as such, would move to further enhance the relationship between the countries.
To this end, he said the Ministry of Finance would hold its second meeting with the Chinese Embassy in Ghana.
China Development Bank agreed a $3 billion loan facility with Ghana in 2011, but only about $1billion was disbursed.
By David Adadevoh