Dr. Anthony Akoto Osei
MEMBERS OF Parliament (MPs) have voted to approve a request for a waiver of Import Duties, Import VAT, GETFund levy, NHIL, EXIM Levy and Special Import Levy amounting to the Cedi equivalent of $1,838,792 for China Gansu International Corporation for Economic and Technical Cooperation and China Railway Major Bridge.
The taxes were waived on materials, equipment and works to be procured for the implementation of the Accra Intelligent Traffic Management Project (AITM Project).
Out of the total amount, $1,112,451 was waived for China Gansu International Corporation for Economic and Technical Cooperation and $726,341 for China Railway Major Bridge.
The AITMP comes under the Tranche B Facility Agreement between Ghana and the China Development Bank.
The request was laid in the House yesterday by the Minister for Monitoring and Evaluation, Dr. Anthony Akoto Osei, on behalf the Minister of Finance.
The Chairman of the Finance Committee, Dr. Mark Assibey-Yeboah, said the committee referred to the 1992 Constitution, Public Financial Management Act, 2016 (Act 921) and the Standing Orders of Parliament in considering the tax waiver request.
Background
Government of Ghana signed a Master Facility Agreement (MFA) and other related finance documents with China Development Bank on December 16, 2011 for a term loan facility in the amount of $3 billion to be utilized to develop 12 infrastructure projects under two tranches.
He stated that tranche ‘A’ had a 15-year facility for $15 billion at Libor +2.95 per cent, while the tranche ‘B’ was a 10-year facility for US$16 billion at Libor +2.85 per cent.
He revealed that since the MFA was signed, four subsidiary agreements out of the 12 projects designed to benefit from the MFA had been signed, and mentioned them as the Western Corridor Gas Infrastructure Project (WCGIP), ICT Enhancement Surveillance Project (ICT Project), Coastal Fish Landing Sites and the Accra Intelligent Traffic Management Project.
He said Parliament on Monday, December 3, 2018, approved by resolution the fourth subsidiary agreement between Ghana and the China Development Bank for an amount of $210,660,000 in relation to the AITM project under the tranche B facility.
“The purpose of the fourth subsidiary agreement is to draw funds from the Master Facility to finance the AITMS and the Road Completion and Consultancy project,” Dr. Assibey-Yeboah explained.
According to him, Clause 14.1 of the particular conditions of the contract puts the burden of taxes on the project related items on the employer (in this case the Government of Ghana working through the Ministry of Transport).
By Ernest Kofi Adu, Parliament House