President Nana Addo Dankwa Akufo-Addo yesterday met members of the Council of State behind closed doors to discuss, among other issues, the high import taxes and volumes of tax exemptions.
The Council, after series of meetings with some key stakeholders, believes that the two issues needed the urgent attention of the government.
Prior to yesterday’s meeting with the President, the Council had engaged the Customs Division of the Ghana Revenue Authority (GRA), Ministries of Trade and Industry, Finance, and Ghana Union of Trade Association on the issues.
The findings from the engagements, together with the Council’s recommendations, were the basis for the meeting with President Akufo-Addo yesterday.
Although details of the meeting were not made public, government has already given a hint on its decision to review its policies on tax exemptions.
Government has planned to reverse the trend with the introduction of measures to boost revenue mobilisation and create strong foundations for the economy.
President Akufo-Addo, in his message on the state of the nation before Parliament about a fortnight ago, described the current tax exemption policy as the “Achilles heel” of his administration and “a growing menace to fiscal stability and revenue generation.”
In the last eight years, tax exemptions in respect of import duty, import VAT, import NHIL and domestic VAT is reported to have grown from GH¢392 million, that is 0.6 per cent of Gross Domestic Product (GDP) in 2010, to GH¢4.66 billion, that is 1.6 per cent of GDP in 2018.
The figures do not include exemptions from the payment of corporate and individual income taxes, concessions on tax rates, petroleum tax reliefs, customs tax exemptions enjoyed by diplomatic missions, and waiver of processing charges at the ports.
“If we continue at this rate, in less than 16 years, half of Ghana’s revenue base will be given away as tax exemptions.”
“This is not sustainable, and we intend to do something about it to reverse the trend,” President Akufo-Addo said in his message on the state of the nation.
BY YAW KYEI