President Akufo-Addo says tax exemption policies being implemented by the government is negatively affecting the country’s revenue mobilization with a dire consequence in the near future.
He assessed that the situation is a growing menace to Ghana’s fiscal stability.
According to the President, in the last eight years, tax exemptions have grown from GH¢392 million, which accounted for 0.6% of GDP in 2010 to GH¢4.66 billion in 2018 representing 1.6% of Ghana’s GDP.
Speaking at the State of the Nation Address on Thursday, President Akufo-Addo noted, “Revenue mobilization poses the biggest challenge in the management of our economy with the tax exemption policy, in particular, proving to be an Achilles heel and a growing menace to fiscal and revenue generation.”
He added, “If we continue at this rate, in less than sixteen years, half of Ghana’s revenue base will be given away as tax exemptions.”
The president said government intends to introduce suitable measures to stem it.
“We intend to do something about tax exemptions, by introducing suitable measures that may disrupt the easy and comfortable arrangements that many have become accustomed to, but which we have to take to ensure that we have the firmest of foundations for the economic take-off that has escaped us for so long.
In 2017, import exemptions granted to foreign companies and other institutions rose by 15.5 per cent to GH¢2.6 billion from GH¢2.3 billion in 2016.
