The CEO of the Ghana Investment Promotion Authority (GIPC), Yofi Grant, has raised alarms over the mistreatment of foreign-owned companies by tax officials from the Ghana Revenue Authority (GRA).
Grant reported that the GIPC, responsible for promoting investment opportunities both domestically and internationally, regularly receives complaints from three to five foreign-owned businesses each day.
These companies are distressed by ongoing harassment linked to inconsistent tax charges and policies.
Addressing a panel at the Canada-Ghana Chamber of Commerce (CANCHAM), Mr. Grant emphasized that this persistent harassment, combined with other investor challenges such as unfavorable tax policies, exchange rate instability, and inflation, could severely hinder the attractiveness of Ghana as an investment hub.
He expressed concern that these issues could undermine Ghana’s economic appeal, particularly as foreign direct investment in Africa has seen a significant decline following the COVID-19 pandemic.
“The GIPC is concerned about the negative impact of tax harassment on foreign investors’ confidence in the Ghanaian economy. We urge the GRA to address these concerns and ensure a more conducive business environment for all investors,” he appealed.
Yofi Grant called for a united effort to tackle tax-related challenges, aiming to ensure fair treatment for investors and establish a stable business environment.
This appeal comes at a crucial time. Since 2017, Ghana’s economic landscape has been increasingly affected by tax policies, leaving investors and businesses struggling with high loan interest rates, currency fluctuations, inflation, and additional taxes that obstruct growth and sustainability.
The burden of high taxes is leading to reduced consumer spending and diminished business investment, which in turn depresses overall economic activity. This decline can negatively impact economic growth and decrease government tax revenues.
Highlighting the economic ramifications, Grant pointed to the recent exodus of multinational companies such as Glovo, Nivea, Game, Jumia Food, and Unilever. He attributes their departure to Ghana’s challenging economic conditions.
“Post COVID-19, Ghana’s unstable economic situation has forced numerous international corporations to move all or a portion of their operations to our neighbouring countries, especially Cote d’Ivoire. Notwithstanding the country’s abundance of natural resources and generally stable political climate, several economic difficulties have resulted in the departure of some industries’ important players,” he said.
The fluctuating value of the cedi has notably affected profit margins, particularly for businesses reliant on importing raw materials for production.
During the panel discussion, while recognizing the challenges posed by high operating costs and taxation, participants encouraged foreign investors to thoroughly understand the tax regulations and ensure their operations comply with the law.
Additionally, the Ghana Revenue Authority (GRA) was urged to explore innovative methods for collecting outstanding taxes, rather than frequently conducting on-site inspections at business premises.