Tax exemption policy needs review
That the economy is going through many challenges because the country’s finances are in dire straits is a statement that very few Ghanaians will dispute.
To be able to overcome these difficulties, we need to collect enough revenue to finance the government’s programmes and projects, so that the state can provide the necessary infrastructure for the well-being of all.
The Ghana Revenue Authority, which spearheads the collection of the country’s revenue, has been at its wits’ end to ensure that enough is collected to meet the country’s expenditure needs.
In spite of this, there appears to be some unscrupulous importers who find ways to deprive the nation of revenue through collusion with some state officials whose duty it is to collect taxes.
That situation has compelled the authorities to pursue a number of measures to address the challenges. The Special Operations Unit (SOU) set up by President John Mahama is one of those measures to address revenue leakages at the ports.
If the agencies responsible for revenue collection and monitoring were up to their duties, it would not have been necessary to set up the SOU.
But we all bear witness to the result of the work of the unit. Since its inception, it has identified loopholes, especially in the warehousing sector.
One of the areas that have been of concern is the tax exemption granted individuals and companies which appears to be leading to the loss of large volumes of tax revenue.
The Daily Graphic, therefore, welcomes the call by the destination inspection companies (DICs) for the government to review the current exemption policy, since it has created room for abuse and loss of revenue to the state.
The DICs say the current exemption regimes result in the collection of duties and taxes lower than what they are expected to pay and proposed that institutions and individuals seeking exemptions be made to pay the duties and thereafter put in claims for refund from the Ghana Revenue Authority (GRA).
The DICs are well positioned to know exactly what pertains at the ports and their observations and recommendations cannot be brushed aside.
Some companies, the DICs say, always import items not to distribute immediately but put them in warehouses, without paying the requisite duties and taxes.
The recent discovery by the SOU that these companies were re-exporting the commodities is disheartening.
The dishonesty and the desire to cheat the state by ex-warehousing the goods with improper or no documentation is also of great concern to us. It will not be surprising to know that some of these cheats are the very ones crying wolf over the challenges in the economy.
We urge the government to listen to the DICs and institute measures to address the loopholes, even if it means cancelling the exemption policy.
The Daily Graphic also thinks that the government must have a look at the free zones companies, since it is most likely that some of them could be abusing the regimes under which they are permitted to operate.
