Business News of Wednesday, 10 February 2021
Source: www.ghanaweb.live
2021-02-10Don’t give tax holidays to foreign investors repatriating profits - Economist to govt
play videoDr William Godfred Cantah, Economist
Economist at the University of Cape Coast Dr William Cantan has charged government to take a relook at its laws on foreign direct investments for mutual benefit.
Ghana offers competitive incentives to investors such as tax holidays which could run for years. Companies in the real estate sector enjoy up to 5 years of tax holidays.
According to him,
Read full articlethe existing laws on FDIs give room for businesses to gain more than the country.
Speaking to GhanaWeb, Dr Cantan said the investment climate in Ghana is welcoming to foreign companies hence the need for laws that will bring a win-win situation.
“The main reason why countries will go in for FDIs is that they have not adequately mobilised funds for developmental activities. So in situations where funds can be mobilised FDIs may not be needed. Once a country is unable to mobilise then they may turn to FDIs.
We should change our foreign investment laws by giving investors options. If they want a tax holiday, they should not be made to repatriate their profits at least within the number of years they will enjoy tax holidays and vice versa,” he explained.
Dr.Cantan also expressed doubt of a possible loss of FDIs should the country restructure its laws on foreign investments.
“Ghana’s foreign investments are mostly in the extractive industry so a firm that is coming to mine your gold or oil will definitely be motivated to come because the returns on investments is high. I doubt we will lose investors once we have the right business atmosphere for them.”
The Government of Ghana has made increasing FDI a priority and acknowledges the importance of having an enabling environment for the private sector to thrive.
According to the UNCTAD's World Investment Report 2020, FDI flows in Ghana decreased from 3 million to US$2.3 million between 2018 and 2019.
The FDI stock reached US$38.5 million in 2019. Mining and oil exploration are the main sectors that attract most of the FDI.
