The Standard for Automatic Exchange of Financial Account Information Law will allow the Ghana Revenue Authority (GRA) to request for tax information on the operations of such business that happen outside Ghana.

This means the GRA will compel financial institutions outside Ghana if they are convinced of instances of tax evasion by an investor who also operates in Ghana.

The new Bill comes at a time that the government has outlined a massive plan to clamp down on tax evasion and improve revenue collection.

A Deputy Finance Minister, Kwaku Kwarteng justified the passage of the law during the debate at the second reading of the Bill on Tuesday, February 27, 2018.

“If we implement the formal reporting standards by imposing on the financial institutions an obligation to report information regarding the financial accounts of responsible individuals or entities to the Ghana Revenue Authority after conduct of due diligence with respect to those accounts,” he argued.

Mr. Kwarteng added, “Mr. Speaker what this Bill is therefore seeking to do is to create the framework in which this exchange of information will happen in an orderly, properly regulated way.”

The Standard for Automatic Exchange of Financial Account Information was first laid on the floor of the House in December last year (2017).

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By: Pius Amihere Eduku/citibusinessnews.com/Ghana

The post Parliament to pass another law to track tax evasion appeared first on Citi 97.3 FM - Relevant Radio. Always.

March 1, 2018 looks set to be a date importers will wish never came. On that day, two new tax policies will be out doored- the excise tax stamp and the Harmonised ECOWAS Common External Tariff (CET). Importers have asked for leniency. But a third levy for fumigating containers and their contents is in the works.

This is a tough balancing act for the country’s finance minister, whose basket of promised social goods need sufficient cash, but at the same time he needs to ensure the private sector is not unnecessarily overburdened to achieve the political goals.

It does seem until the local business environment is deliberately induced to boost domestic enterprise and manufacturing that can compete with basic goods and services we import, there would only be the option to tax the joy out of import business. That is assuming all the taxes so imposed go into the government’s vaults. Recent records of a 34.5% year–on-year increase in port revenues could actually be double had the processes accompanying the paperless system been fully deployed by port officials.

Im anycase, the fortunes of the importer may actually be dwindling with yet another Fumigation tax. The cargo fumigation levy had been contemplated under the previous administration which did not see the light of day because of a change in government. Now though it has been given full support by the current administration- The fumigation of cargo is to be undertaken by a Turkish company- The Turkish company is the service provider with the Shippers Authority as client and the Ghana Health Service as health regulator.

All stakeholders in the import business, especially freight forwarders have been served notices to register online by March 1, 2018 in order to pay $5 per each passenger car imported and disinfected. All other vehicles will pay $10 each. It is envisaged that all containers for imports and exports will be subjected to similar unspecified fees and could be higher. These charges DO NOT include VAT or any other tariffs government may impose.

There is nothing essentially wrong with disinfecting cargo as disease agents can be transported to hitherto safer environments. However, it is important to ask the critical question of how unique this service is that it merited a sole-sourced procurement process which imposes very unfair terms on government’s agencies and by extension on importers. The fees seem to have been solely determined by the service provider.

Article 4.9 of the agreement states ‘’ The Ghana Shipper Authority shall ensure that the SERVICE PROVIDER is placed on the existing mandatory electronic platform for the collection of fees and charges that have been determined by the SERVICE PROVIDER to ensure that all imports and exports subject to the GRA Customs regime pay the fees stipulated in this Agreement’’.

The contract says that the service provider of the fumigation services shall conduct business at our existing ports, and any other ports we will build in the future for the next 25 years with an option for a 10 year extension. The demand for extension is skewed in favour of the service provider even as we are yet to determine its capacity.

Sadly, the parties to this contract ‘’acknowledge that the service provider shall NOT be liable for any outbreak of foreseen or unforeseen epidemic, diseases, etc’’ Rreference article 3.7 of the agreement). Surprisingly, the agreement states that ‘’ the service provider has the right to assign, transfer all or in part of any of its rights arising out of this agreement’’.

For a country that purports to be interested in ensuring skills transfer and some amount of local content, it is sad that a service that is not unique to be provided by an external company under these worrying circumstances certainly is a call to death of budding and experienced local enterprises.

There is more, but suffice to say that when this project was contemplated under the previous government, the Attorney-General then, Mrs., Marietta Brew Appiah-Opong cautioned the then Ministry of Health in her legal opinion about the excesses related to parliamentary approvals, fees and charges , responsibility for externalities such as disease outbreaks and crucially the duration of the contract.

Mrs. Brew Appiah-Opong offered economically sound advice on how to proceed with the agreement to ensure Ghana’s public private partnership and local content mantra was given a befitting facelift with this project. I agree with her legal opinion. I am not sure her opinion was factored into the June 23, 2017 agreement under the new government. I am not sure the current Attorney-General, Ms. Gloria Akuffo has seen this agreement. If she hasn’t she should. Officials of IMANI are still demanding answers from those who signed this contract.

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Source: IMANI Ghana

The post IMANI Ghana raises concern over imports, exports fumigation levy appeared first on Citi 97.3 FM - Relevant Radio. Always.

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.

According to William Owusu Demitia, a Senior Associate Consultant at Ali-Nakyea & Associates, this would help government identify key issues that has to be addressed before a nationwide implementation.

As part of measures to improve domestic resource mobilization, the Finance Minister during the 2018 budget reading announced that new tax reforms to be introduced by government this year will see an upward review of property rates as well as the intensification of its collection.

Speaking to Citi Business News, Mr Owusu Demitia said the implementation of the property rate is a step in the right direction.

“Renewed zeal for the collection of the property rate is welcome. Government should however take its time in implementing it. Government needs to get the valuation right and also get the public to understand the need for the property rate,” he advised.

Property income taxation has long been seen as an area largely neglected by Ghana’s tax authorities.

Enforcement of the tax has been weak, with property owners either not paying at all or deferring payment for years.

There’s also a general perception that properties are grossly undervalued by the assemblies.

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By: Bobbie Osei/citibusinessnews.com/Ghana

The post Pilot property tax rate before implementation—Tax Analyst appeared first on Citi 97.3 FM - Relevant Radio. Always.

He however admitted that, there is the need for a dedicated source of funding for the programme if it is to be successful.

[contextly_sidebar id=”9TxPg4oz3D9unnwcisaKYrVxYNBFhnnI”]Mr. Ablakwa’s comment comes on the back of a suggestion by New Patriotic Party (NPP) Member of Parliament for Effutu, Alex Afenyo Markin, that government could consider taxing Ghanaians in order to accrue funds to finance its flagship free Senior High School (SHS) policy.

According to him, sustaining the policy was so crucial that risking the anger of Ghanaians by imposing a special tax to fund it will not be out of order.

“We want to sustain the policy. The policy is at a cost to the state. If it means that at a point, some taxation should be imposed to sustain it, it wouldn’t be far-fetched. If I get any opportunity in government circles, I will suggest it,” the legislator has said.

Speaking on Eyewitness News on Tuesday, Samuel Okudzeto Ablakwa said it would be unfortunate to tax Ghanaians who were already struggling with the numerous tax obligations they are required to meet.

He argued that having a dedicated funding source for the programme should not necessarily result in the introduction of an additional tax.

“The tax is certainly going to increase the already ongoing hardship which Ghanaians are complaining about generally. If you talk to the business community, they are talking about the cost of doing business now being very high, importers are complaining that duties are going through the roof” he said.

Other sources

The government had in the 2018 budget statement, announced that it would set up a fund to receive voluntary contributions from individuals to support the implementation of the free SHS programme and the educational sector as a whole.

However, this plan has been criticized by the Minority who believe this is an indication that government does not have the funds to properly implement its much-touted programme.

The Member of Parliament for the North Tongu Constituency, Samuel Okudzeto Ablakwa, said the government cannot afford to rely on voluntary contributions to fund education, particularly free SHS, as projections for those funds may not materialize.

“No country runs public education on just voluntary funds. What if the Fund is not considered attractive and you don’t really get as much as you are expecting. We can’t leave the destiny of our children’s quality education to just a voluntary fund where we don’t really know the projections. You cannot just depend on voluntary funds, you can’t run education that way. You need a concrete plan and you need a well-defined funding source. It’s clear that government is struggling to fund it and struggling to identify a clear funding source,” he had said.

The government has also been encouraged by ACEP to immediately pass the Mineral Revenue Management Act to serve as an additional source of funding for the programme.

“ACEP recommends that the government should pass the promised Mineral Revenue Management Act to create additional sources of funds from solid minerals to finance the free SHS policy,” the policy think tank stated in a 10-page document analyzing the 2018 budget with regards to oil and gas,” the think-tank said.

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By: Farida Yusif/citifmonline.com/Ghana

The post ‘Free SHS tax’ will burden Ghanaians – Ablakwa appeared first on Citi 97.3 FM - Relevant Radio. Always.

The Finance Minister during the 2018 budget reading reiterated that the constitution enjoins MMDAs to mobilize revenue through sources like the property tax, collection of which is low due to insufficient valuation capacity and the high cost of valuation.

Property income taxation has long been seen as an area largely neglected by Ghana’s tax authorities.

[contextly_sidebar id=”rAypflGR99kRLmrOp3DbJ8uUB8bywfUm”]Enforcement of the tax has been weak, with property owners either not paying at all or deferring payment for years.

Some property owners who spoke to Citi Business News pointed out that even though they were willing to pay the tax, the authorities have not educated the citizens on how to pay and where to pay.

“If they simplify the payment system for us we will pay. I want to pay my property tax as a citizen but I don’t even know how to go about it. I think there must be proper education,” a property owner in Accra said.

Another said, “I’m aware of it but I don’t know the rate. The difficulty is that people in less developed areas find it hard to pay the property tax because they’ve not been provided with basic things”.

Meanwhile, a property owner who pays his tax maintained that “Everybody should do well to pay the property rate tax. I always pay mine. I paid GHC 100 this year”

Of all the MMDA internally generated funds mandated by the Local Government Act of 1993 (Act 142), property taxes provide the surest source of revenue if properly managed. However, numerous challenges that inhibit adequate generation of revenue from real properties include poor database of real property inventory, obsolete valuation lists, inadequate and unskilled staff among others.

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By: Bobbie Osei/citibusinessnews.com/Ghana

The post Most property owners unware of property tax appeared first on Citi 97.3 FM - Relevant Radio. Always.

The mandatory levy for vehicle users to tow broken down vehicles was suspended last month after pressure from the public and civil society.

[contextly_sidebar id=”ruoV8tyS3frqO2kx8HAhelr8R9E8oU8g”]It is unclear when the report of the committee would be ready.

After briefing Parliament on what had become of the implementation process, Transport Minister, Kwaku Ofori Asiamah told Citi News’ Duke Mensah Opoku that further consultations will be held before a decision on the two tax is made.

“We are waiting for the report from the parliamentary select committee and based on that we will take a decision on the matter. The process has began but we are having challenges with the implementation so we are consulting further,” he said.

Suspension of implementation tow tax

Government had plans of implementing the tow tax but subsequently suspended it after after the Roads and Transport Committee of Parliament met with the Road Safety Commission, the DVLA and other stakeholders over the matter.

The Ranking Member on the Committee, Kwame Agbodza had explained that the committee wants to probe the issues surrounding the implementation and possibly recommend the recall of the Legislative Instrument supporting the fee.

Some MPs including the Deputy Minority Leader, James Avedzi Klutse, had earlier called for the policy to be scrapped following these reactions. But Osei Owusu said the critics lack understanding of the issue.

Prior to the suspension, the First Deputy Speaker of Parliament, Joe Osei-Owusu, had described as narrow-minded, arguments against the mandatory towing fee.

In a Citi News interview, Mr. Osei-Owusu however argued that, the policy is in the supreme interest of road users after research showed that a huge number of road accidents are caused by broken down vehicles.

The NRSC was expected to begin a nationwide towing programme in July 2017, to ensure that all vehicles that breakdown on highways were cleared off the roads.

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By; Marian Ansah/citifmonline.com/Ghana
Follow @EfeAnsah

The post Gov’t yet to decide on tow tax implementation appeared first on Citi 97.3 FM - Relevant Radio. Always.

Confirming the decision on Eyewitness News on Monday,  the Deputy Minister, said the suspension, which is in response to public concerns over the fees, will give Parliament time to reassess the Legislative Instrument supporting the fee.

“We are suspending it to ensure that the right things are done. If I say right things are done, I mean the public has not been given enough education. One of the major issues that has come up is the issue about the cost- the fees that they are paying , although it has been approved by Parliament. If it means that we have to go back to Parliament to amend that part of the fees that will be collected so people can have some respite, why not? What the Minister has done is to make sure that we listen to cry of the Ghanaian people…”

Mr. Glover explained that National Road Safety Commission (NRSC), in a bid to protect road users, introduced this intervention even before the NPP administration took over the helm of affairs.

“The principle and concept behind this idea was to get rid of broken down vehicles that were killing people on the roads. It is based on this idea that the National Road Safety Commission started this project way back before the NPP government came to office.”

[contextly_sidebar id=”r2LLbzILVmex3OGiWHEWqRvWTWyQ6Msc”]Government announced the suspension after the Roads and Transport Committee of Parliament met with the Road Safety Commission, the DVLA and other stakeholders over the matter.

According to the Ranking Member on the Committee, Governs Kwame Agbodza, the committee wants to probe the issues surrounding the implementation and possibly recommend the recall of the Legislative Instrument supporting the fee.

Some MPs including the Deputy Minority Leader, James Avedzi Klutse, had earlier called for the policy to be scrapped following these reactions. But Osei Wusu said the critics lack understanding of the issue.

Prior to the suspension, the First Deputy Speaker of Parliament, Joe Osei-Owusu, had described as narrow-minded, arguments against the mandatory towing fee.

In a Citi News interview, Mr. Osei-Owusu argued that, the policy is in the supreme interest of road users after research showed that a huge number of road accidents are caused by broken down vehicles.

The NRSC is expected to begin a nationwide towing programme in July 2017, to ensure that all vehicles that breakdown on highways are cleared off the roads.

For this reason, drivers are required to pay a road safety fee ranging between GHC 10 and GHC 200 in addition to their road worthy certification fees. Commercial vehicles and taxes will pay GH¢40, mini buses will pay GH¢80, while heavy duty trucks will pay between GH¢80 and GH¢200 annually, depending on their tonnage. Non-commercial vehicles are expected to pay GH¢20. The Road Safety Management Services Limited (RSMSL) has already acquired some 118 trucks ahead of the implementation, for the exercise. But several persons have kicked against the policy calling on government to scrap it immediately.

A former President of the Ghana Institution of Engineers (GhIE), Ing. Magnus Lincoln Quarshie however says the approach is a total rip-off.

Mandatory towing fee criticisms baseless – Osei-Owusu 

But Osei-Owusu, who once headed the Driver and Vehicle Licensing Authority (DVLA), insisted in an interview with Citi News’ Duke Mensah Opoku that the counter arguments are not tenable.

“Your car may never have to be towed but you can run into a vehicle that is disabled. Sometimes we are just parochial; we discuss the issue only on one side. What you are discussing is not your vehicle; it is the risk to road users. The risk that a broken down vehicle possesses is not to only the driver but to everyone who plies the road,” he stated. He urged that the arguments should revolve around the dangers that such broken down vehicles could cause to human lives. “Anytime there is a disabled vehicle on the road, there is a risk to the life of every road user. So if we don’t focus on removing the risk to the road and we focus on how much will it cost, who is doing the work, we’ll be missing the problem. It’s my vehicle that has broken down, and during the time, I don’t have money and it will genuinely happen to many people.”

“That is what politicians do; jumping on bandwagon…sometimes I think that some politicians are too hasty. If you ask them to go deep into the matter they have not even considered all the issues. As far as I’m concerned it is a risk to everybody.”

The 1st Deputy Speaker who was a lead discussant during the formulation of the policy in 2011, said initially the policy was to charge only heavy duty truck owners, but it was later extended to other categories of vehicles in order to create a pool of funds for undertaking such programme.

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By: Ebenezer Afanyi Dadzie & Marian Ansah/citifmonline.com/Ghana

The post Tow tax implementation suspended – Titus Glover appeared first on Citi 97.3 FM - Relevant Radio. Always.

At least, this is the indication from the industry with the implementation of the scrapping of the 1 percent special import levy by the GRA.

[contextly_sidebar id=”qAogGIuGzjWkwGHbZdRI7r9VdogPstWJ”]The businesses were tipped to benefit from the tax cuts to ease the cost of doing business in Ghana.

But the situation may not be so. The news of the scrapping of the taxes on imported spare parts was met with much appreciation by spare parts dealers at Abossey Okai, here in the nation’s capital.

The traders were already indicating some price cuts following the elimination of the taxes. But the implementation of such juicy appears to be out of the radar.

Apparently not happy with the development, the importers describe the move as a display of betrayal.

The Executive Secretary of the Importers and Exporters association, Sampson Asaaki Awingobit, explained their frustration to Citi Business News.

A statement by the Acting Commissioner General of the GRA, Emmanuel Kofi Nti, directed officers at the ports and customs to adhere to the implementation of the 1 percent special import levy from last Friday.

Citi Business News’ checks have revealed that, the HS codes that were referred to by the directive from the GRA, only centered on Chapters 84 and 85 that affect electrical machinery and their parts, as well as nuclear reactors, boilers, machinery and mechanical appliances and their parts.

In the HS code, Chapter 87 rather centers on the vehicles other than railway or tramway rolling stock and parts and accessories thereof.

Information available to Citi Business News also indicates that, the government is currently engaging the spare parts dealers to identify lists that will be affected by the tax cuts.

This is however subject to the ratification by Parliament since they fall under the Common External Tarrif whose review is subject to a minimum of five years.

Meanwhile, a tax analyst, William Demetia, has predicted dire consequences for all stakeholders.

He however urged the government to manage expectations.

“I think that we need to manage expectations…some people labour under the assumptions that there will be no charges on their goods. Apart from the duties, there are other components that are worked on before the imported goods leave the ports. All these would have to be explained for people to understand that it is only the import duties that will be taken away,” he remarked.

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By: Pius Amihere Eduku/Jessica Ayorkor Aryee/Lawrence Segbefia/citibusinessnews.com/Ghana

The post No tax cuts for Abossey Okai spare parts traders appeared first on Citi 97.3 FM - Relevant Radio. Always.

The worry is that the move could lead to a massive drop in the inflow of strategic investments into the country, and has the potential of scaring away existing strategic investors with the end result being a drop in economic activity and job creation.

Minister for Finance, Ken Ofori-Atta, has breached article 174(2) of the 1992 constitution, GIPC Act 2013 (865) as well as inter-country protocols on trade and investments through the withdrawal of tax exemptions from strategic investing companies in Ghana.

This was confirmed by Kweku Kwarteng, Deputy Minister Nominee for finance during his vetting in parliament today [Tuesday].

Government through the Minister for Finance has written to withdraw legitimately and lawfully granted tax exemptions from strategic investing companies in Ghana – a move which completely shoots down the one district one factory policy which is aimed at bringing strategic investors into all districts of the country to create employment and economic development.

Many strategic investors have chosen Ghana ahead of its West African neighbours because of the tax exemption incentive through the Ghana investment promotion Act. 2013.

According to Kwaku Kwarteng, who is also MP for Obuasi West, the move by government is intended to deal with irregularities in the exemptions regime.

Answering a question from minority leader Hon. Haruna Iddrisu as to why such a counter-productive measure is being used by government to scare away strategic investors, Mr. Kwarteng said he supports the measure because the ministry of finance has given a good reason for its decision.

“The Minister of Finance has responsibility to administer tax exemptions. There will be a refund to those beneficiaries. I know the implementation of that has started. In my humble opinion, so long as the value of the tax is removed from the beneficiaries, it constitutes a fair administration of the exemption especially as we have been told by the ministry of finance that it is intended to deal with irregularities of the exemptions regime’’, He said.

The Minority Leader, Haruna Iddrisu, however challenged the deputy finance minister nominee that the withdrawal of the tax exemptions from strategic investors by the ministry of finance is a breach of an Act of parliament which approved the tax exemptions to these strategic investing companies, and since the current tax variations by the ministry did not receive approval of parliament.

Article 174 (2) of the constitution states ‘’Where an Act, enacted in accordance with clause (1) of this article, confers power of any person or authority to wave or vary a tax imposed by that Act, the exercise of the power of waiver or variation, in favour of any person or authority, shall be subject to the prior approval of parliament by resolution.”

The withdrawal of the tax exemptions by the Finance ministry has received a backlash from the business community especially foreign and local strategic investors who feel unfairly treated by the new government’s directive because of the sudden financial burden it has brought to their businesses.

The Ghana Investment Promotion Centre Act 2013, (865) “provides for the encouragement and promotion of investments in Ghana, to provide for the creation of an attractive incentive framework and a transparent, predictable and facilitating environment for investments in Ghana.”

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By: Ebenezer Afanyi Dadzie/citifmonline.com/Ghana

The post 1-district, 1 factory under threat by withdrawal of tax exemptions? appeared first on Citi 97.3 FM - Relevant Radio. Always.