Govt states position on tax exemption measure
Government will only take a second look at the newly introduced administrative measures in the tax exemption system, after it concludes a comprehensive review of the entire regime, a Deputy Minister of Finance, Mr Kwaku Kwateng, has said.
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He explained that the comprehensive review would help check the irregularities in the current tax exemption regime.
The measure which was announced in the 2017 budget statement requires business operators who are eligible for exemption from duties and taxes, to make an upfront payment of the taxes and then have them refunded after 30 days.
But many business operators, especially importers, have been complaining about the measure, saying the move would pose a cash flow challenge to their operations.
Speaking at a forum organised by the Association of Ghana Industries (AGI) and BUSAC over the tax exemption issue in Accra, Mr Kwateng said although he empathised with the concerns of the business community, the move is necessary to correct the anomalies in the system.
“From the point of view of the business importers, if they have to pay money and get a refund, it is definitely an inconvenience. I sympathise with their concerns. But it is also important to look at this from the government point of view.”
“For those of us sitting at the government treasury, whose responsibility it is to ensure that government finds the money to do the thing that people want, we also consider that it is something that must be done,” he explained.
He, however, gave an assurance that the government might relook at the concerns after a holistic review of the entire tax exemption regime.
This, he said, could happen before the next budget was presented to parliament in November 2017.
“It is part of a comprehensive review of our exemptions regime. As soon as we have finished with this review and we are clear in our minds that a lot of the irregularities have been removed, we will take a second look at this administrative measure,” he added.
AGI concerned
The Chief Executive Officer of the AGI, Seth Twum Akwaboah, said the forum was created to pave way for businesses to engage the government in a dialogue concerning issues that hampered their operations.
He, however, expressed the hope that the concerns of businesses would be addressed expeditiously.
“You may have a good policy but implementation may have challenges because information may not have trickled down to all the people in the chain. So the business operators may have a challenge and they may not have a clear understanding of the policy you’re trying to implement. And even the Customs officials; some are giving different interpretation to the policy.
“Therefore, the minister acknowledged that there is a lot of work that needs to be done, as far as that is concerned, you cannot begrudge him. What is important is to carry on with the work and make sure that the issues that we raised are actually taken on board and resolved as soon as possible,” he stated.
