Corporate tax incentives cost nation $2.27b
Ghana loses $2.27 billion annually from corporate tax incentives alone, resulting from lapses in domestic revenue mobilisation and the country’s inability to collect maximum corporate taxes, especially from multinationals, the Dean of the University of Ghana Business School (UGBS), Professor Joshua Vindenaba Abor, has disclosed.
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He said a recent newspaper report indicated that four out of a sampled 22 mining companies paid dividends based on the government’s 10 per cent carried interest in the last 10 years.
An Auditor-General’s Report indicated that only four out of a sampled 22 mining companies had paid dividend to the government over the period, the audited accounts of the Consolidated Fund for 2014, revealed.
Those which paid are AngloGold Ashanti Company Limited, Aboso Goldfields Limited, Goldfieds Ghana Limited and the Ghana Manganese Company Limited.
They paid a total of GH¢43.168 million into the Consolidated Fund at 10 per cent carried interest.
Prof. Abor made the disclosure during a panel discussion on: “Ghana’s quest for social and economic transformation: Challenges and prospects”, at the University of Ghana, Legon, last Wednesday.
CPESDP
The discussion sought to assess and evaluate Ghana’s Coordinated Programme of Economic and Social Development Policies (CPESDP).
The CPESDP is a mandatory document prepared in fulfilment of the 1992 Constitution.
The forum was a collaboration among the global research institution, the Effective States and Inclusive Development (ESID), the UGBS, the Institute of Statistical, Social and Economic Research (ISSER) of the University of Ghana and the Ghana Centre for Democratic Development (CDD-Ghana).
He said inadequate domestic revenue mobilisation would undermine the government’s quest to transform society and the economy.
Poor supervision by the Non-Tax Revenue Unit (NTRU) and the Public Investment Department (PID) of the Ministry of Finance has led to loss of revenue from mining companies over the past 10 years (2005-2014).
Professor Abor, therefore, urged the government to adopt pragmatic measures to address the financial leakages in the country’s revenue mobilisation system.
Sustainable revenue generation
Prof. Abor said the implementation of Ghana’s development goals would require innovative means of sustainable revenue generation and financing.
He said the country attained a lower middle-income status in 2010, resulting in a reduction in donor inflows, hence the need for austerity measures.
The government, in its quest to enhance revenue mobilisation, he said, ought to strengthen its administrative structures for revenue mobilisation to ensure efficiency in natural resources and the management of returns.
“Access to sustainable financing is necessary to derive the growth required to facilitate Ghana’s social and economic transformation in addressing the country’s infrastructure and social services backlogs,” he said.
Economic leakages
He observed that leakages in the economy constituted a major hindrance to the success of the transformational agenda.
“It will be very difficult to make significant progress as far as socio-economic transformation is concerned without addressing the issue of economic leakages. There is the need for a strong public will to deal with corruption, as well as appropriate measures to be put in place to plug all the forms of leakages,” Prof. Abor stressed.
For his part, an economist, Dr Robert Osei, expressed doubt over the political will to implement the agenda should there be a change in administration.
“Any structural transformational agenda concern should adhere to the political will, so that if there is any change, it will still be pursued,” he added.