The Majority Leader in Parliament, Alexander Afenyo-Markin, has argued that concerns over the tax waivers granted to certain companies are misguided.
The Effutu MP believes that the emphasis should be on the economic benefits these waivers bring rather than the sums involved.
He made these remarks in response to the Minority in Parliament’s objections to the waivers.
Afenyo-Markin suggested that fixating on the specific amounts of the waivers is an oversimplification and misrepresentation of the incentives’ true purpose and impact.
Speaking on JoyNews’ AM show on Monday, he said, “Countries are competitive for investments, and they have all manner of incentives to attract people to bring capital. We are talking about post-Covid entrepreneurial decisions. Entrepreneurs would have to take decisions as to which country they would go to. You go to Qatar today, in their free zone their policy on foreign direct investments is so attractive.”
“Tax wavers, for the first ten years, you are not supposed to pay tax on profit and all. You have that space. Now this government introduces one district, one factory. The aim of it is to create a space for businesses to thrive. If you give that incentive, that money, that capital is invested in the business. That is why I am saying, do not quantify it, that ‘oh, the government is giving tax incentives of three hundred million, oh, that money could have been used for something else’. You will get it wrong”.
The Majority Leader of Parliament emphasized the significance of offering tax incentives to businesses in Ghana, highlighting the necessity for patience as companies advance through various development stages.
The Effutu MP endorsed the government’s decision to grant tax waivers to 42 businesses, arguing that these incentives are essential for fostering expansion and exploration in the Ghanaian market.
“In my own constituency, an Indian company has established a tissue factory, the first of its kind in West Africa, and this tissue factory is going to produce the raw material base for all the tissue companies. You know the tissue companies we have in Ghana; they all import the pulp, the jumbo; they come and cut it and all. This company is going to produce it, and they got attracted to Ghana because of the one district and one factory.
“They are almost 60% done, and we are all in parliament dragging our feet. There are many companies going through the same thing. I am feeling it because if this company is completed, they will start employing my people. The companies that are importing would not have to import, so the pressure on the Cedi would go down, and if they had those tax incentives, they would be able to do their phase two and employ more,” he noted.
In 2021, the Ministry of Finance began the process to secure about $335,072,712.13 in tax exemptions for 42 companies under the government’s One District One Factory (1D1F) initiative.
The Exemptions Act, 2022 (Act 1083), was introduced to Parliament by the former Minister for Finance, Ken Ofori-Atta, in 2022.
Notably, Sentuo Oil Refinery Limited is requesting the largest exemption amount, totaling $164,633,012.00.