The Ghana Revenue Authority (GRA) has released GH¢54 million to tax exempt companies few months into the implementation of the new import duty and tax exemption regime.
The government, through its 2017 budget, issued a directive for all companies, which qualify for import duty and tax exemption, to pay the duties upfront and then apply for a refund.
The system whereby companies under the tax exemption category import goods into the country without paying taxes have been abolished.
Rather, all companies, whether under the tax exempt category or not, will have to pay their import duty and taxes upfront and then those that are exempt from taxes will later apply for a refund.
The period for refund under the new tax system is 14 days after application has been made.
The reviewed tax exemption policy has however made provision for exceptional cases where companies may be exempt from the system.
This was disclosed at the Ghana Investment Promotion Center (GIPC) third quarter CEOs breakfast meeting held under the theme, ‘Ghana’s Tax Exemption Regime.’
Explaining the rationale behind the new regime to participants, Sampson Akligo, who represented the Deputy Minister of Finance, said the new regime was instituted to check abuse of the previous tax exemption policy and reset the country’s economy for business.
He said “the object of our review was to eliminate abuse, the government is focused on reducing taxes to enhance production so we are also determined to tackle the systemic abuse in the exemptions regime.”
Exemption Process AT GIPC
Chief Executive Officer (CEO) of the GIPC , Yofi Grant, said the centre was mandated under section 26 of the GIPC Act to grant import duty and Value Added Tax (VAT) exemptions to qualified companies registered with the centre.
“A typical approved strategic investment has incentives which include exemptions from the payment of import duty and VAT on plant machinery and equipment specifically for the project, construction materials specifically for the project and on locally purchased construction materials and equipment required specifically for the project,” he added.
Mr Grant, however, urged participants at the meeting not to hesitate to share their experiences in terms of the new tax regime to better inform government on how to make the business environment more convenient.
By Jamila Akweley Okertchiri