Business News of Thursday, 25 November 2021
Source: www.ghanaweb.live
2021-11-25Some startups are abusing 1D1F to evade taxes – Ato Forson
Ranking Member of Parliament’s Finance Committee, Dr. Cassiel Ato Forson
Companies enjoy up to 10years of tax exemption after registration
Ghana loses about 5 billion cedis to tax exemption each year
Government should create a substitute for imports instead of review of benchmark values
Ranking Member on government’s Finance Committee in Parliament, Dr Cassiel Ato Forson, has hinted that most companies are taking advantage
Read full articleof One District, One Factory (1D1F) to escape from paying taxes.
Speaking on Adom FM’s Burning Issues, Ato Forson explained that because laws of the country give 10 years of tax exemptions to startup companies, some owners intentionally shut down after they exceed the period.
He cited privileges enjoyed by partners of the one district one factory project as one of the strategies being used by these startups to avoid paying taxes.
According to him, some businesses after operating for a while, change their business names and owners to continue enjoying tax exemption privileges.
Dr Forson explains that this has become the norm because companies engaging in 1D1F will be given tax exemption, all existing companies are now partnering government for 1D1F tax exemption privileges.
This according to him, is causing Ghana to lose over GH¢5 billion to tax exemption every year.
“The truth is that Ghana’s tax exemption is being abused, some existing companies decide to join the one district one factory all because government will give them tax exemption and they collect a huge amount of money from the government even if they have already imported their good to operate,” he said.
Dr Forson, wants government to create a substitute instead of a review on the benchmark policies, adding that if government can place a tax on the importation of rice to discourage people from importing it will be fully supported.
“My worry is about the benchmark value, which is about to go up; we have to create a substitute. If the government can come out and say that we can sell the rice we have produced and for that matter impose more taxes to halt the importation of rice, I will be the first to talk for government it,” he explained.
