Parliament suspends approval of $23.98 million tax waiver for Platinum Properties

Parliament has put on hold the approval of a tax waiver of $23.98 million to Platinum Properties Limited, a special purpose vehicle entity owned and controlled by Inter-Afrique Holding Limited and the Ghana Infrastructure Investment Fund (GIIF).

The First Deputy Speaker, Mr Joseph Osei-Owusu said the decision to defer a vote on the matter was due to the lack of quorum in the House.

“My attention has been drawn to the fact that we do not have sufficient numbers, that is 50 per cent or more to take a decision and so the decision is deferred,” he ruled last Friday.

Arguments

The ruling came after both the Minority and the Majority had argued over whether Platinum Properties Limited qualified as a strategic investor to be granted the waiver of import duties, import VAT, import National Health Insurance Scheme (NHIS), import GETFund levy, domestic VAT, domestic NHIL and domestic GETFund levy on materials, plant and machinery and equipment it would procure.

The materials are to be used by Platinum Properties Limited for the £126 million Pullman Accra City Hotel and Serviced Apartments, a hospitality project that is billed to become Ghana’s largest and most distinguished hotel facility.

Mobbing up loan

Prior to the ruling, the Minority Chief Whip, Alhaji Mohammed Mubarak Muntaka, had argued that the minority were vehemently against the $24 million tax waiver.

He said the GIPC Act of 2013 described a strategic investor as one having his own money of $50 million or more and that the money should be brought from abroad to boost the economy.

“Mr Speaker, in my view even if the investor is bringing that money from abroad, it does not mean we should give the kind of waiver that we are giving,” he said.

He asserted that Platinum Properties did not deserve to be granted a tax waiver on grounds that it was not the Pullman Company itself that was coming to Ghana.

“This is a franchise granted a Ghanaian who has decided to take up the name in agreement with Pullman International.

“While this is allowed, the company’s intention is to mop up from our local banks a whopping $94.5 million and the result is that it will be crowding out our business people in their access to loans,” he said.

Detrimental to economy

Mr Muntaka argued that since there would be no money coming from abroad as foreign direct investment, it would be “detrimental to the economy.”

He said $94.5 million, representing 75 per cent of the total amount of $126 million needed for the project, would be mobilised from local banks, while 25 per cent of the money, representing $13 million, would come from the GIIF, with the sponsor of the project, Dr Kwame Nyantakyi Owusu, who had not been gazetted as a strategic investor, would bring up $18.5 million, including assets and properties.

Transparency

In a counter argument on behalf of the Majority, the Deputy Minister of Finance, Mrs Abena Osei-Asare, said even though Platinum Properties qualified as a strategic investor and had satisfied the conditions to qualify for tax waiver, the Majority decided to bring the matter before Parliament for legislators to scrutinise the request.

“We are being transparent by bringing it here for all Ghanaians to see what we are doing and the things that the company is bringing to qualify for tax waiver.

“No strategic investor has been brought before Parliament for waiver since 2015/2016, yet the former President gave several tax waivers, including one to Tang Palace,” she said.

She also dismissed the claims that the local partner for the Pullman Accra City Hotel and Serviced Apartment was Dr Nyantakyi, saying it was rather Inter-
Afrique Holding Limited.

The Deputy Minister urged the House to adopt the Finance Committee’s report and approve by a resolution of Parliament the request for a waiver for the company.