Finance Committee Chair provides updates on tax reliefs, US$250m World Bank facility -lauds Minority for collaboration

The Chairman of Parliament’s Finance Committee, Patrick Yaw Boamah, has commended the Minority caucus for endorsing the recent tax waivers approved by the legislature, describing it as a significant step in deepening parliamentary collaboration.

As Parliament prepares to adjourn sine die on Tuesday, July 30, 2024, it has so far approved a tax waiver of €1.5 million for the supply and installation of integrated e-learning laboratories in Senior High Schools.

Additionally, lawmakers have approved a US$38.66 million tax waiver for import duties, Import VAT, Import NHIL, Import GETFund Levy, Exim Levy, Special Import Levy, and other fiscal reliefs on materials and equipment imported by the Ghana Bauxite Company (GBC) as a strategic investor.

Mr. Boamah explained that the government’s stake in GBC increased to over 23.8%. Due to capital injection and the tax waiver, GBC has boosted production from 500,000 to over one million tonnes. This expansion aims to create jobs and ensure the company pays the required taxes.

“The beauty of these approvals is that the Minority supported it. Sometimes there is some misunderstanding regarding tax waivers, but their position is that when the government takes an interest in some of these entities, they will support it. We commend the Minority for coming on board.”

Mr. Boamah, who is also the Member of Parliament for Okaikoi Central, noted that his Committee faced a challenge approving a US$250 million World Bank facility meant to support the financial sector due to a different approach by the Minority.

He said, “We are having a little challenge with regards to the US$250 million World Bank facility aimed at supporting the financial sector. The banks went through a difficult time during DDEP. If you read the budget, the government said they were going to support the financial sector through the Ghana Financial Sector Stabilisation Fund, with a cedi equivalent of US$500 million, and also seek World Bank financing of US$250 million. In all, a pool of GHc15 billion is what the government is seeking to mobilize to support the banking sector.

The challenge is that the Minority wants a fund legally established through an act of parliament. However, this is a credit line from the World Bank where the banks would apply, and an analysis would be made before disbursement, different from creating a fund like the Road Fund, Zongo Development Fund, or Special Initiative Funds that we are all used to. So, a decision was taken at the committee by Majority decision.”

The Finance Committee has outstanding reports that are expected to be approved before adjournment, including the report of PIAC on the management and use of Petroleum Revenues for the period January to December 2021, the Reconciliation Report on the Petroleum Holding Fund for 2021, and the Semi-Annual Report of the BoG on the Ghana Petroleum Funds for the period July 1 – December 31, 2020.

Other reports include the Annual Report on the Management of the Energy Sector Levies and Accounts for the Year 2021, Examination of the Foreign Exchange Receipts and Payment Issues of the Bank of Ghana from January 1 to October 31, 2022, the Annual Report on the Petroleum Funds for the 2021 Fiscal Year, and the Annual Report on the Collection and Utilization of the African Union Import Levy for the 2021 Fiscal Year.

By Eugene Davis