Gov’t seeks US$185m tax waiver for airport contractors

Government has asked parliament to approve some US$185 million in tax waiver of direct and indirect taxes for contractors working on various airport projects in the country.

According to a document seen by thebftonline.com, the amount is needed for both local project transactions and offshore transactions for imports to enable Ghana Airport Company Limited (GACL) meet its obligations with the various contractors.

The amount to be granted will cover five-year period as per the GACL’s tax exemption obligations and is expected to cover the Terminal 3 project at the Kotoka International Airport which is under construction, the Ho Airport, Wa airstrip, Tamale and Kumasi Airports.

The amount to be secured will cover the following construction companies M/S Mapa Insaat Ve Ticaret (Contractor), M/S Constutora Queiroz Galvao S.A(acting through its branch, Construtora Queiroz Galvao S.A Sucursal Gana), PW Ghana (Mourne Ghana) Amandi Holding Company Limited, Amalgamated Designs and Bans Consults among others who have project agreement with the GACL.

The GACL secured a loan of US$250 million to undertake the construction of a new terminal known as Terminal 3, at the Kotoka International Airport from a consortium of banks led by Ecobank Capital.

The company later also secured another US$150 million in funds on the strength of its own balance sheet to fund the Ho Airport project, as well as the rehabilitation of Kumasi Airport. Part of the said amount is also being expended on rehabilitation of the Sunyani and Wa Airports.

Management of GACL, following the promulgation of the Airport Tax Amendment Act in 2013 which allows the GACL to retain 100 percent of its revenues -- turned to private capital to improve aviation infrastructure in the country.

Prior to amendment of the Act, 60 percent of all airport taxes went directly to the Ghana Revenue Authority to support the national budget while GACL retained just 40 percent.

Growing passenger throughput, increasing number of French-speaking West Africans in Ghana, and the relatively peaceful nature of the country are some of the major lures for airlines in the region.

The domestic transit passenger volumes increased from 14,000 in July 2015 to over 22, 000 in July this year. General international passenger departures also increased by about 6 percent; from about 72,000 in July 2015 to about 76,000 in July 2016.