GIPC BREAKFAST SERIES: DISCUSSION ON EXEMPTIONS REGIME

Several months ago, the Government of Ghana led by the Minister of Finance cancelled all Tax Exemptions on arrival of goods through Ghana’s borders.

In a discussion organized by the GIPC between the Ghana Revenue Authority and the representatives of the Ministry of Finance the following explanations and answers were given:

The reason for immediate cancelation of tax exemptions at Ghana’s borders was fraud adding up to loss of revenue due the state up to 1.4 billion GHC annually.

Clarity was given on these issues:

  • Diplomatic missions and UN recognized NGOs and goods for the Presidency and offices under that can get a waiver to pay these exempted taxes.
  • Free Zone companies are excluded from payment and recovery regime.

At this moment and guaranteed in the law is a 90 day refund period for genuine applicants (and awarded) of tax exemptions.

The GRA is working on improving that period to 45 days and the ultimate target is 21 days.

The business community asked for refunding of 1 week.

The Executive Director of EBO Ghana, Nico van Staalduinen estimated that a refunding within 90 days would create a financing problem for these tax exempted companies of about 1 billion Ghana Cedis against our current interest rate.

The Government would, besides retrieving the monies as a result of fighting abuse, collect 1 billion of interest thanks to the new regime, which is not an incentive to try to shorten the refunding period.

 

 

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