Business News of 2014-01-15

BoG opens special account for airport taxes

Airline operators will soon be required to pay taxes due the Ghana Airports Company Limited (GACL) into a special designated account with the Bank of Ghana (BoG).

The new arrangement is as a result of harmonising the tax collection and allocation mechanism between the Ghana Revenue Authority (GRA) and the GACL.

The GRA is responsible for collecting all taxes due the state; however, government in 2013 approved the allocation of all monies realised in airport taxes to the GACL to enable the company undertake maintenance and expansion works on the country’s airport infrastructure.

However, the process for releasingthe revenue to the GACL has been fraught with delays -- prompting the Ministry of Finance and Economic Planning, the GRA and the BoG to coordinate the special account’s opening.

“It has been agreed that an account be opened with the BoG that will allow airline operators pay their taxes [and charges] directly into it,” Mr. Twumasi Ankrah Selby, Chief Director of the Ministry of Transport which oversees the GACL told the B&FT.

Until March last year, 60 percent of all airport taxes went directly to the Ghana Revenue Authority to support the national budget, while 40 percent was left for the GACL.

About GH¢57million of airport taxes collected in 2012went to support the national budget, while GH¢38million accrued to the GACL

The International Civil Aviation Organisation’s (ICAO) regulations postulate that “airports may produce sufficient revenues to exceed all direct and indirect operating costs (including general administration, etc.) and so provide for a reasonable return on assets at a sufficient level to secure financing on favourable terms in capital markets for the purpose of investing in new or expanded airport infrastructure and, where relevant, to remunerate adequately holders of airport equity”.

The government’s priority aviation projects this year include the expansion of facilities at the Kotoka International Airport (KIA) and the expansion and eventual conversion of the Tamale airport into an international airport to service the northern belt.

A loan of US$100million secured from the Brazilian government for the Tamale airport development project will be on-lent to the GACL, which runs the facility.

“The Ministry of Finance and Economic Planning (MOFEP) is in the final stages of signing the on-lending agreement with the GACL,” Mr. Selby said.

Source: B&FT
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