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TAX INCENTIVES
International Tax Justice Academy
30th Nov. 6th December, 2014
Chibeze Ezekiel
cezekiel@christian-aid.org
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Introduction
Tax incentives are concessions, waivers, provisions
and conditions made available to tax payers to serve
as a means to reducing their tax liability enacted into
law to boost investment into an economy.
Tax incentives are usually enacted into law and are
aimed at attracting foreign direct investment into an
economy as well as encouraging domestic investment in
certain specific sectors of the economy or locations of a
country
.
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2. Tax Holiday
Companies are given time limits typically between 5 to
15 years from the start of their operations:
Tree crop farmers (mango, sheanuts, cashew, coffee, oil palm, rubber and
coconut) enjoy 10years tax exemption from the date of first harvest;
Cash crop farmers (groundnuts, cassava, yam, rice, pineapples, maize,
etc.) enjoy 5 years tax exemption from the date of commencement of farming
Commercial processors of cocoa by-products enjoy 5 years income tax
exemption from the date of start of operation
Cattle ranchers have 10 years from date of start of business
Poultry and other livestock including fish farmers also have 5 years from
the start of business
Agro-processing companies enjoy 5 years income tax exemption from the
day of start of business.
Producers of canned, packaged or processed meat, fish and crop
products enjoy 3 years exemptions from the date of commencement of
business.
Companies registered under Ghana Export Processing Zones (Free
Zones) also enjoy tax holidays from 10 years from the start of operation
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3. Location Incentives
The Ghana Investment Promotion Centre Act 478
(now replaced by Act 865 of 2013)
With the exception of Accra (capital) and Tema (Industry City), all other
regional capitals enjoy a tax rebate of 25%;
All other places in Ghana other than the ten (10) Regional Capitals and
Tema enjoy a tax rebate of 50%;
Also, for agro-processing the emphasis is on value addition in the cocoa
sub-sector where any processing with sub-standard cocoa beans, cocoa husks
and other cocoa wastes as the predominant raw material qualifies for location
incentive in the following ways:
- Regional Capitals other than Accra and Tema has a tax incentive rebate of
90% of the applicable corporate rate (25%);
- Any investment of the kind in Accra or Tema has a tax incentive rebate of
80% of the applicable corporate rate;
- Other locations outside the regional capitals and the entire Northern, Upper
West and East Regions have a 100% incentive rebate on the applicable tax
rate.
APPLICABLE
RATE (%)
DESCRIPTION
40
30
Automobiles,
construction
and
equipment, heavy general purpose
80
20
10
Projected
Span
earth
moving
10
6. Other exemptions
Goods and services imports of the President of
Ghana, the blind, deaf and dumb, churches and other
religious bodies
Trade fairs and exhibitions, advertising matter,
passengers personal baggage and effects, educational,
cultural and scientific materials of a broad range of types
and those imported by the United Nations or its Agencies,
fishing floats and gear as approved by the Commissioner
Specific goods for specific uses such as: Volta
Aluminum Company Ltd (VALCO); Volta River Authority
(VRA); The British Council, infants foods; machinery;
apparatus and spare parts for agricultural purpose;
chemicals for agricultural purpose as certified by the
Ministry of Agriculture.
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National
Local
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National
Influencing tax policies through Ghana
Integrity Initiative (GII)
-
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Local
Case Studies: IMPROVE: Improving maternal health service
delivery through participatory governance
Overall Project objective:
contribute to the effective
delivery of maternal health
services in Ghana and progress
towards the achievement of MDG
5 targets by 2015
A beneficiary of the tax
sensitization training. He is the
District Citizens Monitoring
Committees (DCMCs) Focal Point.
50-year old Michael Awaana;
married with 3 boys and 2 girls
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Open governance
Transparency
Accountability
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