CEOs demand prompt payment of tax refunds - To improve their cashflow
Chief Executive Officers of some major businesses in the country have prevailed on the government to expedite action on the release of their tax refunds to help them solve cash flow and liquidity.
Advertisement
They explained that the prompt release of the tax refunds would also save the ordeal of having to accumulate more interest on loans contracted from the banks.
Contributing to discussions at the CEOs Breakfast Forum under the auspices of the Ghana Investment Promotion Centre (GIPC) in Accra on August 3, the CEOs said they were not against the payment of taxes but it behoved the government to ensure that the tax agencies also played its role of refunding what was due them without delays.
The forum is held quarterly as a platform for CEOs and business owners to voice their concerns, share ideas and propose measures that can be taken to help reduce the ease of doing business in the country.
Exemptions guidelines
As part of the new guidelines, companies are expected to honour their tax obligations and later apply for a refund.
Per the guidelines, such applications shall state the justification for the application and be accompanied by adequate supporting documentation, including those that show proof of payment of the related duties and taxes for which refunds are being applied for.
It further states that for the avoidance of doubt, the following documents must be attached: The basis for the exemption (i.e. by which law, by which agreement, or by which authorisation, etc.); recommendation from sector Ministry, Agency or Institution; Import Declaration Form (IDF)/Electronic Ministries Departments and Agencies (eMDA) printout; Bank receipts / Evidence of Payment; Commercial invoices among many other things.
The guidelines also require that the Commissioner-General may require applicants for such refunds to provide additional information as is reasonably necessary in support of the application and such applicants for such refunds upon the submission of all supporting documents shall be given a receipt that shall state; among other things.
Other Trending Stories
In sharing thoughts on the issue of tax exemptions, the CEOs agreed to the various procedures that needed to be followed for the refunds applied for and stated strongly that the GRA should also be able to vet those applications on time and make the refunds as prompt as they demanded it.
According to them, many a time, they took huge loans from the banks to settle those taxes and therefore expected the tax authorities to also expedite actions to refund to prevent them from accumulating avoidable interests which could eat into their capital.
{loadmodule mod_banners,Nativead1}
Rational to review tax exemptions
Earlier, the Chief Executive Officer of the Ghana Investment Promotion Centre (GIPC), Mr Yoofi Grant, said the government’s review of the tax exemptions policy was meant to block the numerous loopholes that were robbing the state of millions of dollars in revenue and not to rather discourage investments from coming into the country.
According to a research conducted by the Ministry of Finance last year, the country lost about $1.5 billion in revenue through the abuse of the tax exemption policy, a practice which should not be allowed to persist.
Mr Yofi Grant, said, “the government is aware that there are challenges with the new stringent measures put in place to stop the abuses in the system and is ready to remedy the situation to enable those qualified to enjoy what they are due”.
Revenue shortfall
The explanation comes at a time when total revenue and grants for the government amounted to just GH¢17.5 billion (8.6 per cent of GDP) as against a target of GH¢20.5 billion (10.1 per cent of GDP). Although not stated, it is anticipated that such abuses in the tax systems resulted in the government’s inability to meet its revenue target.
In the event, the government had to cut its expenditures for the period as part of measures to keep its fiscal consolidation measures on track. It is, therefore, expected that the move to bring sanity into the tax exemption system will not be seen as a punitive measure by local and foreign companies but one that is aimed at helping the government to achieve its revenue targets to stimulate the economy and accelerate the pace of development.
Mr Grant said the GIPC would continue to work with investors, both local and foreign, to keep themselves abreast of the requirements to enable them operate within the law and appreciate the decision of the government.
“To benefit from these incentives, you must register with the GIPC”, he said and added that, “this one thing many companies do not do but have to do”.
The Director, Financial Sector Division of the Ministry of Finance, Mr Sampson Akligo, asked business owners to liaise with the ministry to enable them to appreciate the guidelines and the rationale for the government’s decision.
“We needed to block the loopholes and much as some deserving companies may feel hurt by the action, we are prepared to take them through the process and where they deserve, they will be exempted through the right process”, he said.
Advertisement