The CEO of PEF, Nana Osei Bonsu explains that the current regime has impacted adversely on businesses due to delayed payments for the provision of services or sale of products to clients.

He tells Citi Business News the issue has also compelled most of them to resort to loans to meet their tax obligations hence increasing their cost of doing business.

“Government most of the time does not allow them enough time to collect what they are responsible to transmit so they have to use their own income to be able to remit to government which is eroding their working capital. Sometimes they have to borrow from the financial institutions at a cost,” Nana Osei Bonsu asserted on the sidelines of a tax seminar on the new Amnesty Law.

Businesses, particularly Oil Marketing Companies (OMCs) are affected the most under the current tax remittances regime.

Per law, they are expected to remit their taxes within the first twenty-one days of the month (by the third week) of the month.

But Nana Osei Bonsu believes this must be revised and if possible, discount to such businesses.

“So that is why we are thinking that the government should look into the burden on them as to the collection and remitting. If anything at all, the government could give them discounts for the services that they render because they have to get employees and all that before they remit,” he added.

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By: Pius Amihere Eduku/citibusinessnews.com/Ghana

The post PEF seeks revision of upfront tax payments appeared first on Citi 97.3 FM - Relevant Radio. Always.

Some have cast doubt over the policy’s ability to reduce tax evasion while others believe the policy could increase tax compliance.

The concerns were raised at a session on the relevance of the Tax Amnesty Law on businesses by the UK Ghana Chamber of Commerce on Tuesday, February 20, 2017.

Passed in December 2017, the tax amnesty bill seeks to improve voluntary compliance among taxpayers.

Under the law, defaulting businesses will be allowed to pay a revised tax obligation that they had been in default for a period of time.

The current law is expected to last for nine months; between January to September 2018.

The Technical Advisor to the Commissioner General, Henry Yentumi explained to Citi Business News, the scope of compliance they are seeking at the end of the period.

“First is to set the base line, we must come out in terms of our taxpayer numbers, the revenue that we expect which is also part of the thinking of promoting the amnesty as well as scheduling the various processes including the guidelines.”

This year’s amnesty period will be third time that the GRA has implemented the policy over the last decade.

Businesses demand critical feedback

For the CEO of the Private Enterprise Federation, Nana Osei Bonsu, the absence of the outcome of a similar exercise carried out in 2013, is likely to impact on the objective this time around.

“If we are going to do this time around, let’s review from the businesses’ perspective; why did you fail to comply, what happened to you; how is the situation affecting you, etc. because that is the area where we can actually bring value as voluntary tax compliance limits the cost of tax administration,” he stated.

Meanwhile a Tax Consultant with Ernst and Young, Isaac Nketiah Sarpong also explains that knowing the reasons for the non-compliance should help identify further mechanisms to correct the trend.

“The OECD reported somewhere in 2016 that only sixty – nine companies actually showed up to be registered when the Amnesty was passed in 2013. But as at now, we do not know how much came into the kitty as a result of the amnesty so these are things that I think should have been number one on the board of the GRA.”

GRA to resolve concerns soon

Reacting to these concerns, Mr. Yentumi stressed that the outcome should be produced as soon as possible which will influence the outcome of the existing amnesty rules.

“GRA is still working on not just administrative guidelines but still looking forward to what kind of information was available from the previous tax amnesty issued in 2013. But admittedly the information has not been readily available and there have been some slowness in getting some of these things out,” he explained.

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By: Pius Amihere Eduku/citibusinessnews.com/Ghana

The post Businesses divided over success of Tax Amnesty law appeared first on Citi 97.3 FM - Relevant Radio. Always.

Speaking during the Investment Opportunities Forum at the Citi Business Festival, Mr. Osei-Bonsu said this would be more beneficial to Ghanaian businesses and investors, asserting that, “we are not asking for protectionism. We are asking for support.”

[contextly_sidebar id=”fjRvterpvzI55us0BmMIwX2Z276SsUx7″]He mentioned how other countries support their own business by “subsidizing their businesses to come here [to Ghana].”

“If a business in Holland is coming to explore possibilities in Ghana, they can tap into a resource to do feasibility studies at zero cost to them. Do we have that support in our system? No, we don’t. You have to use your limited resources, in addition to all the studies and research that you need.”

As another example, he noted that an international hotel chain borrows could in an external environment at a 3 percent interest rate, but a Ghanaian hotel chain borrows at 30 percent.

Mr. Osei-Bonsu also noted the failings within the Ghana Investment Promotion Center that had contributed to the struggles of indigenous businesses.

“The minimum requirement for a strategic investor [per the Ghana Investment Promotion Center] is GHc 50 million. How many Ghanaian businesses have GHc 50 million? So automatically, we have sidelined our own people. When the business comes on shore, they apply to GIPC and get a tax exemption. The tax exemption is 25 percent. The Ghanaian doesn’t have GHc 50 million to qualify as a strategic investor so they don’t get the tax exemption.”

The bottom line for Mr. Osei-Bonsu was that, Ghanaian businesses simply aren’t competitive, hence the need for “support from government to undertake everything we need to allow us to be able to be competitive.”

Incentives would boost indigenous businesses

On his part, Yofi Grant, the Ghana Investment Promotion Center (GIPC) CEO, said a drive to prop up indigenous businesses would be a step in the right direction.

He noted that the GIPC had been a protectionist for long enough, and now needed to start incentivising.

“The preference is to incentivize indigenous businesses not protect them; because all the history and literature seems to indicate that when you incentivize your local business, they do much better that when you protect them.”

“When you protect them, you have other issues that come; competitiveness, quality, Inter-market pricing that does not work well for them. What you want is to elevate them and project them… ours is to make sure that we create our own big businesses,” Mr. Grant explained.

The Investment Opportunities Forum was in partnership with the Ghana Investment Promotion Center (GIPC), and was aimed at addressing challenges that face locals and foreign investors in Ghana.

The forum is a one-day conversation on the state of Ghana’s readiness to attract the needed investment for economic transformation.

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By: Delali Adogla-Bessa/citifmonline.com/Ghana

The post Ghanaian businesses want support, not protection – Nana Osei Bonsu appeared first on Citi 97.3 FM - Relevant Radio. Always.