tax incentives - ghana case study
TRANSCRIPT
-
8/10/2019 Tax Incentives - Ghana Case Study
1/19
1
Christian Aid - Ghana
CASE STUDY: GHANA
International Tax Justice Acade!
"#thNo$% & 'thDece(er) *#1+
Chi(e,e E,eiel
ce,eiel.christian-aid%or/
TA0 INCENTIES
mailto:[email protected]:[email protected] -
8/10/2019 Tax Incentives - Ghana Case Study
2/19
Introduction
Tax incentives are concessions) 2ai$ers) 3ro$isionsand conditions ade a$aila(le to tax 3a!ers to ser$e
as a eans to reducin/ their tax lia(ilit!enacted into
law to boost investment into an economy.
Tax incentives are usually enacted into law and are
aimed at attracting foreign direct investment into an
economy as well as encouraging domestic investment in
certain specific sectors of the economy or locations of a
country
.
*
-
8/10/2019 Tax Incentives - Ghana Case Study
3/19
"
1% Cor3orate Incoe Tax
Corporate income tax in the mining sector for instance
was cut from as high as 45% in 19! to "5% in "#11
$t the same time initial capital allowances were
increased from "5% to #% within the same period as
well as a long mining list of exemptions and other
expatriate employee tax incentives all in line with theattempt to attract investment thereby watering down tax
rates.
The most significant corporate tax ad&ustment has
been the reduction of the corporation tax rate of '".5% in"##4 to "5% in "##!
-
8/10/2019 Tax Incentives - Ghana Case Study
4/19
Cor3orate Incoe Tax Continue4%%
+
(n "#11 however the corporate income tax rate for
mining was revised upwards in response to civil societyadvocacy to '5%
)ther concessionary low rates such as the % for the
export of certain determined *uantities of manufactured
goods and agricultural products were broaden in scope tocover rural ban+ing, non-traditional exports particularly
processed agricultural products
$lso the hospitality industry currently en&oys a reduced
tax of "#% from a previous ""% and "5% in that order
-
8/10/2019 Tax Incentives - Ghana Case Study
5/19
*% Tax Holida!
5
Companies are given time limits typically between 5 to
15 !earsfrom the start of their operations
Tree crop farmers /mango sheanuts cashew coffee oil palm rubber andcoconut0 en&oy 1#!ears tax exe3tionfrom the date of first harvest,
Cash crop farmers /groundnuts cassava yam rice pineapples maie
etc.0 en&oy 5 !ears tax exe3tionfrom the date of commencement of farming
Commercial processors of cocoa by-products en&oy 5 !earsincome tax
exemption from the date of start of operation
Cattle ranchers have 1# !earsfrom date of start of business2oultry and other livestoc+ including fish farmers also have 5 !earsfrom
the start of business
$gro-processing companies en&oy 5 !earsincome tax exemption from the
day of start of business.
2roducers of canned pac+aged or processed meat fish and crop
products en&oy " !earsexemptions from the date of commencement ofbusiness.
Companies registered under 3hana xport 2rocessing ones /6ree
ones0 also en&oy tax holidays from 1# years from the start of operation
-
8/10/2019 Tax Incentives - Ghana Case Study
6/19
"% 6ocation Incenti$es
'
The 3hana (nvestment 2romotion Centre $ct 47
/now replaced by $ct !5 of "#1'0
8ith the exception of $ccra /capital0 and Tema /(ndustry City0 all otherregional capitals en&oy a tax rebate of "5%,
$ll other places in 3hana other than the ten /1#0 egional Capitals and
Tema en&oy a tax rebate of 5#%,
$lso for agro-processing the emphasis is on value addition in the cocoa
sub-sector where any processing with sub-standard cocoa beans cocoa hus+sand other cocoa wastes as the predominant raw material *ualifies for location
incentive in the following ways
- egional Capitals other than $ccra and Tema has a tax incentive rebate of
9#% of the applicable corporate rate /"5%0,
- $ny investment of the +ind in $ccra or Tema has a tax incentive rebate of
#% of the applicable corporate rate,
- )ther locations outside the regional capitals and the entire :orthern ;pper
8est and ast egions have a 1##% incentive rebate on the applicable tax
rate.
-
8/10/2019 Tax Incentives - Ghana Case Study
7/19
7
+% Ca3ital allo2ance - Internal 8e$enue Act) *### 9Act 5*; $erall @roect o(ecti$e:
contribute to the effective
delivery of maternal health
services in Ghana and progress
towards the achievement of MG
5 targets by 20!5
A (eneiciar! o the tax
sensiti,ation trainin/% He is the
District Citi,ens =onitorin/
Coittees 9DC=Cs; ?ocal @oint%
Ke! outcoe: Counit! Health
Coitteeored 3riaril! to
onitor and deand
accounta(ilit! ro the District
Asse(l! 2ith re/ards to ho2
re$enues are ex3ended%
6ocal
-
8/10/2019 Tax Incentives - Ghana Case Study
17/19
6EA8N: Action or 6ocal E3lo!ent)
Accounta(ilit! and 8esource =o(ilisatioN
17
>3en /o$ernance Trans3arenc! Accounta(ilit!
8e$enue Chart oard Counit!-(ased Health @lannin/ < Ser$ices 9CH@S;
-
8/10/2019 Tax Incentives - Ghana Case Study
18/19
Ke! issues coin/ out
2ayment of tax on credit /e.g. cattle
owners in :orthern 3hana0. $n issue of
trust
Churches to start paying taxI
Citiens willing to pay taxes when able
to contribute and demand for
accountability
-
8/10/2019 Tax Incentives - Ghana Case Study
19/19
1