Ghana's Trading Hub News

Parliament approves $832m tax waiver for Tema Port expansion

Parliament on Tuesday approved a $832 million tax waiver for the Meridian Port Services limited for the expansion of the Tema Port.

Meridian Port Services which is funding the project under a public-private-partnership (PPP) program, is one of three companies involved in a joint venture with the Ghana Ports and Harbors Authority (GPHA) to undertake the Tema Port expansion.

The other two companies are Bolloré Africa Logistics and APM Terminals.

 

Minority contest waiver

The Minority in Parliament earlier kicked against the tax waiver which is almost two- thirds of the actual cost of the project which is US$1.5billion.

The $832 million tax waiver requested by the Finance Ministry will see Meridian Port Services receiving concessions on VAT, NHIA Levy, Custom duties, Corporate and withholding taxes.

Speaking to Citi Business News after Parliament approved the waiver the Member of Parliament for New Juaben South and Member of Parliament’s Finance Committee, Dr Mark Assibey Yeboah said government has been shortchanged in the provision of the tax concession.

“These are private people engaged in a purely private business venture. And now they come to government that we have to give them tax wavers. Let them add on all the taxes and you will inflate the project cost at their own detriment. This is a bad deal. We want Ghanaians to know that they are being shortchanged so if you see the port expansion going on, I will say somebody’s pocket is being lined.”

“Because if you applied for a tax concession of 982 million dollars and now it has been brought down to 832 million dollars and you are still fine with it, then there is something in the soup,” he added.

He contends that the amount is too huge to be given out to a private entity engaged in a project that will accrue more profits to it than to the state and says the tax concessions given to the company are not justifiable.

“Port expansion, railway, these are viable and I am saying these are the kinds of things that you expect government to borrow money and do by itself. Because when you do this one the returns and everything goes to the government instead of building community day schools. You borrow money to build community day schools where only the people who live in that vicinity can school.”

Government justifies waiver

But a Deputy Minister of Finance, Cassiel Ato Forson disagrees.

“We are not just sitting down and granting tax exemptions. We agree that the tax exemption has a percentage to revenue is quite big, but again, I have always argued that countries grant tax exemptions. Are you comparing how much we grant as a percentage to GDP to our peers, are you comparing it to that of our neighbours?”

He contends that the amount is too huge to be given out to a private entity engaged in a project that will accrue more profits to it than to the state and says the tax concessions given to the company are not justifiable.

“Port expansion, railway, these are viable and I am saying these are the kinds of things that you expect government to borrow money and do by itself. Because when you do this one the returns and everything goes to the government instead of building community day schools. You borrow money to build community day schools where only the people who live in that vicinity can school.”

Government justifies waiver

But a Deputy Minister of Finance, Cassiel Ato Forson disagrees.

“We are not just sitting down and granting tax exemptions. We agree that the tax exemption has a percentage to revenue is quite big, but again, I have always argued that countries grant tax exemptions. Are you comparing how much we grant as a percentage to GDP to our peers, are you comparing it to that of our neighbours?”

Source: http://citifmonline.com/2016/06/08/parliament-approves-832m-tax-waiver-for-tema-port-expansion/#sthash.ghCrrLex.dpuf


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