Tax exemption irregularities: Hold public officials accountable - PWC Senior Partner

A Tax Partner at PwC, Abeku Gyan-Quansah, has called on Ghanaians to hold public officials accountable for tax exemptions granted to businesses.

He explained that in spite of the passage of the Exemptions Act 2022, (Act 1083) regulating the granting of tax waivers, with a key provision allowing the state to take equity in companies that benefited from such waivers, some exemptions were being granted without transparency and at variance with the legal framework meant to guide the process.

“If you say you can’t carry out a particular activity and you need the state to be part of the game, then the state is also saying that if your business is valued at X, give it a portion of X.

And whenever you think you don’t need it any longer, come and buy it back,” Mr Gyan-Quansah said in Accra yesterday during a panel discussion as part of the Daily Graphic/Ecobank Economic Forum.

He, therefore, warned that it would be a disservice to the nation if Parliament continued to pass such laws designed to ensure value for the taxpayer, but failed to implement them effectively.

“So, if you see the next exemption going to Parliament, let’s all be very interested to find out why the state, in that particular case, is not taking an interest,” Mr Gyan-Quansah rallied the citizenry.

“If we’ve reached a point as a people where we feel we no longer need that provision, we can repeal it. But until then, let’s monitor our parliamentarians, call them, and find out why they’re departing from the law they themselves passed,” he added.

The forum, organised by the Graphic Communications Group Ltd (GCGL) in collaboration with Ecobank Ghana, was on the theme: “A Broad Review of the Economy of Ghana – Then, Now and the Way Forward.”

It brought together policymakers, academics, business executives and other economic actors to discuss the economy and its future.

The First Deputy Governor of the Bank of Ghana (BoG), Dr Zakari Mumuni, was represented by a Director at the Office of the Governor, Osei Gyasi, and featured speakers and panellists such as the Presidential Advisor on the Economy, Seth Terkper; the Director of the Institute of Statistical, Social and Economic Research (ISSER) of the University of Ghana, Professor Peter Quartey, civil society organisations and other participants.

Ambitious projections

Touching on revenue projections, Mr Gyan-Quansah emphasised that while revenue targets were often perceived as overly ambitious, such assessments must be grounded in both internal capacity and external benchmarks.

He explained that a key metric for evaluating tax performance was the tax-to-Gross Domestic Product (GDP) ratio, adding that while the average should have been 20 per cent, the country had consistently underperformed, averaging around 13 per cent to 14 per cent of tax to GDP.

That was below the recommended African average of 16 per cent, stressing that from an external perspective, such ambitious targets were not misplaced.

Mr Gyan-Quansah, however, argued that ambition without structural adjustments justified public doubt, but stressed that there was room for improvement if the right mechanisms, such as tax compliance and behavioural incentives, were enforced.

He further underscored that taxes shaped behaviour, suggesting that while the government was removing some taxes to stimulate activity, it must balance that by tightening compliance measures to help resolve the loopholes in the tax structure and make revenue goals more achievable.

Curbing corruption

The PwC Tax Partner stressed that an effective way to check corruption in the tax system was through the enforcement of professional standards and accountability by certified bodies.

Mr Gyan-Quansah explained that while proving corruption through criminal prosecution could be difficult due to the high burden of proof, ethical lapses could still be addressed through professional disciplinary mechanisms, which had a lower threshold and quicker recourse.

“These institutes already have bodies responsible for discipline. So if somebody believes that somebody has not done their work well, somebody was corrupt, and you cannot establish it using the criminal threshold, you can go and report them to the institutes, he said.

Mr Gyan-Quansah further emphasised that laws passed nearly a decade ago already required that only trained and certified professionals handled tax matters — just as only licensed lawyers could represent clients in court.

Yet, in spite of the legal framework, he said, the Ghana Revenue Authority (GRA) continued to engage individuals who could not demonstrate the required training or certification.

The PwC Tax Partner urged the government and GRA to lead by example in ensuring that anyone presenting themselves as a tax expert was asked to prove their qualifications.