Revenue Mobilization Africa joins Advocacy for the Passage of Tax Exemptions Bill
Chief Executive Officer (CEO) of Revenue Mobilization Africa (RMA), a tax advocacy organization and a member of the Tax Justice Coalition, Geoffery Kabutey Ocansey, is advocating a re-thinking and re-negotiating with stakeholders on Ghana’s tax exemptions regime as well as the swift passage of the Bill which is currently before parliament.
According to him the current tax regime gave foreign companies operating in the country leverage over indigenous ones which are operating at a deficit. Ocansey was speaking in an exclusive interview with ghananewsonline.com.gh on the relevance of a tax exemptions bill and why Ghana needs one urgently to regulate the tax exemptions regime.
He said tax exemptions although not entirely bad in nature have caused a great deal of financial loss to the state, defeating the original purpose for which they were meant.
“Exemptions regime has been there not for this government alone, but governments overtime have granted exemptions which didn’t even go through parliament,” he stated, adding that “the idea of tax exemptions was to bring in foreign direct investment – we understand to that extent, but there’s an alternative school of thought which the RMA is moving for consideration”.
According to the RMA boss, there are 3 pillars on which the country should have negotiated on in inviting these foreign direct investors. He mentioned security as one of such pillars, saying “every investor wishes to invest in a place where their security is guaranteed”, adding that Ghana was a conducive place for any foreign investor as the peace and security the country enjoys cannot be over emphasized. Mr Ocansey also cited the availability of raw materials as one of the pillars around which Ghana’s negotiations with foreign direct investors should revolve.
“It is a holistic fact that our raw materials are readily available, our mineral resources like gold, diamond, bauxite, etc – these are all the raw materials we have that should invite a foreign investor into our country – we should focus on the availability of these assets to attract foreign investors”. He said for instance that gold found in Ghana was of superior quality than gold found in other neighboring countries like Liberia, a fact attested to by the investors themselves.
The RMA CEO further mentioned the availability of skills and labour which he observed can also be harnessed into such negotiations in attracting foreign investors.
“We have persons who are here qualified to do some work – Ghanaians with the requisite skills and labour which can be placed on the negotiating table in our bid to attract foreign investors into our country”, adding that, China negotiated with the world and that’s how come we have the world factory in China, compelling the United States to go to China to tap into its “cheap labour” to the benefit of both countries”.
This he observed can be employed by Ghana rather than having to always go on the tangent of tax exemptions. The tax advocate bemoaned the current practice at the Free Zones enclave where big companies especially the foreign ones were granted a ten year tax holiday to survive after which they start paying taxes saying this practice was short-changing the nation in terms of adequate revenue mobilization.
“There are some companies which operated in different names, they change ownership after the 9th year and still get the opportunity to stay on to exploit the weaknesses in our tax regime – there were weaknesses in our tax regime and so these companies took advantage of it and exploited it to their benefit,” he alleged.
In view of all these “wanton dash out” of money, Ocansey noted that the tax exemptions regime in Ghana has been a very serious issue bedeviling not only Ghana but the whole of the African continent hence there is the need for a re-thinking and re-negotiating around the table with these foreign investors in order to streamline the tax regimes to prevent further losses in revenue to the nation going forward.
