Abeku Gankuansah, tax partner at PwC Ghana, revealed that the current high tax levels in the country are causing some multinational companies to relocate outside Ghana to a more friendly business environment.
“Based on our work to date, we have found that some of these companies have changed their business models by relocating their core operations outside of Ghana to address the challenges.” [high taxes]” he told PM EXPRESS BUSINESS EDITION host George Wiafe on February 1, 2024.
Giving further details, Gyan Quansah said the plan is to produce at a lower cost and export the finished product to Ghana for sale.
He lamented that this deprives most Ghanaians of employment opportunities.
“Some of these companies have moved their operations abroad and are simply exporting back into the country,” he stressed.
He disputed claims that the recent introduction of new taxes was the result of an International Monetary Fund (IMF) proposal under the Ghana program.
“This is more of a unique program that the government has submitted to the IMF on how it intends to rebuild the economy.”
He asserted that a careful study of the IMF and Ghana’s programs shows that the government has made a number of revenue proposals to increase revenue.
“A close reading of Article 4 of the IMF Consultation Report reveals approximately 27 tax measures to improve Ghana’s revenue situation.”
He argued that this does not imply that the IMF forced governments to pay taxes to people or businesses.
Ghana’s tax system challenges
Mr. Gyan Quansah made several recommendations and strongly advocated for an immediate review of the tax law.
“I don’t think we have done a good job with Ghana’s value-added tax framework,” he noted.
He explained that certain laws, known as “plus taxes,” that require companies to pay taxes even if they are making a loss, are unfair.
“A lot of money that is supposed to go into the country is currently in dispute with the tax authorities and that is not good for the country,” he hinted.
He called for speedy resolution of tax disputes through the Tax Disputes Committee.
Corporate concerns
Mark Badu Aboaiji, Chief Executive Officer of the Ghana National Chamber of Commerce and Industry, on the same program, expressed concern about the lack of consultation during the introduction of the tax.
He noted that some of the issues could have been successfully resolved or addressed if there had been the necessary engagement with the business community before these taxes were introduced.
Badu Aboazi cited the recent challenges with the introduction of the Tax Reform Act as an example.
“We are trying to pay taxes, but we will first help companies improve their status and situation so that they can meet their obligations,” he said, adding that companies are not making enough profits to meet their obligations to the state. added.
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