Government to scrap tax retention policy – Yofi Grant

The Chief Executive Officer of the Ghana Investments Promotion Centre, Yofi Grant, has assured investors and the business community of government scrapping its new tax retention policy which request “provisional payments of all imports and taxes” soon.

According to Mr. Grant, the new policy which requires qualified applicant for exemption to pay taxes upfront to be refunded later is a huge disincentive to wooing new investors into the country, and a major cashflow issue for businesses.

The Minister of Finance Ken Ofori-Atta during the 2017 budget presentation, disclosed of a new policy which required all companies, including importers, who qualify for tax and duty exemptions to pay their taxes upfront and make claims which will be refunded in 30days.

This was recently followed with a letter dated March 21, 2017 from the Ghana Revenue Authority, signed by Commissioner Kuudamnuru John Vianney of the Customs Division, to all ports stations in the country, directing that the policy takes immediate effect.

According to the letter, which has been cited by the thebftonline.com, “the government had put in a policy that requires all applicants who qualify for exemption from import duties and taxes to make prior payments and then make a claim for a refund of the amount paid.”

The letter further directed the tax officials to immediately implement the policy, adding: “You are therefore to ensure strict adherence to the policy and report any problems for redress”.

But speaking at a luncheon meeting with the members of the American Chamber of Commerce at the Fiesta Royale Hotel, Accra, the Chief Executive Officer of the Ghana Investments Promotion Centre, Yofi Grant, assured of his offices commitment to have the policy reversed as it’s a great stumbling block to governments agenda of making Ghana an investment hub.

“I must say here that, a recent policy or statement that came out of the budget presentation that makes things difficult at the ports and for businesses is the tax retention, where companies are being asked to pay taxes upfront to be refunded in 30days. We have had a big meeting about it, and the conclusion was that it was a bit of a difficulty because if you are business and you came into Ghana with a net worth of about $500 million and you have to pay these taxes to be refunded to you later, it could be a major cashflow issue. And it will also significantly and negatively impact on your business. So, we need to look at it and take it off.”

“We also have to take off taxes on raw material for production, but before we do that, we need to clearly define what production and manufacturing is. That will let us know exactly who qualifies for these tax exemptions,” he added.

Mr. Grant stressed the need for government to do more to make Ghana the investment hub and the first choice for any person thinking of investing in Africa. Something he says his office, the GIPC was working around the clock to achieve.

He was also of the view that; the business community will have to interact more with government in finding solutions to creating an enabling environment which will allow businesses to thrive, while creating an environment where the citizenry will be happy.

“There are still a lot of things that we ought to do, if we want to become an investment attractive country. Now, why the sudden real focus on investments? For those of you who have studied and followed the economy quiet closely. We inherited an economy that had a major fiscal challenge, because all our revenues were eaten up by recurrent expenditure, and so the government really has no fiscal space as we speak to do any development. But the government’s purpose is to create an environment where the people are happy by attracting investments.”