NDC In Parliament Killing Ghanaian Businesses – Afenyo-Markin Defends Tax Waivers

The Majority Leader in Parliament, Alexander Afenyo-Markin, has accused the Minority Caucus under the leadership of Dr. Cassiel Ato Forson of having an ulterior motive and acting in bad fate by frustrating the granting of tax waivers to some 42 Ghanaian companies under the 1D1F initiative.

Afenyo-Markin opines that the only reason the Minority Caucus is against the granting of the said tax waivers is to frustrate Government business, frustrate the investor community, destroy Ghanaian owned businesses and create unemployment so as to make Government look bad

He said the Minority Leader, Dr. Cassiel Ato Forson, when he was  Deputy Minister for Finance under the then John Mahama led-Government was vocal in defending the granting of tax waivers to several Ghanaian companies therefore it is a shocking hypocrisy for the same Dr. Forson to be the one speaking against the granting of tax waivers to companies under a different Government.

Afenyo-Markin  aired his grievances in a press statement which read:

we may recall that in June 2015, Meridian Port Services (MPS) Limited with the support of the Ghana Ports and Harbours Authority (GPHA) and the Ministry of Transport made an application for tax waivers and concession of US$ 982 million through the Finance Ministry to Parliament. This amount was reduced to US$ 832 million by the intervention of the Minority and on 7th June 2016, Parliament approved the request.

The Minority at the time, argued that Government had been shortchanged in the provision of the tax concession. I remember Dr Mark Assibey Yeboah, the former Member for New Juaben South expressed his grievances on the floor. This was because the waiver was almost two-thirds of the actual project cost. He said; “These are private people engaged in a purely private business venture. And now they come to government that we have to give them tax waivers. 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,”

The then Government and Majority disagreed with the position of the Minority. Hon. Cassiel Ato Forson stated that they were not merely granting tax exemptions without consideration. He acknowledged that the tax exemption, as a percentage of revenue, was significant but argued that countries commonly grant such exemptions. He questioned whether comparisons were being made between the amount granted as a percentage of GDP to that of our peers and neighboring countries.

Hon. Ato Forson emphasized that refusing to grant tax exemptions for future investments could result in those investments relocating to other countries. He pointed out that MPS had the option to invest in Ghana, Ivory Coast, or other neighboring countries, and failure to grant the exemption could lead them to choose a different location.

He further stressed that tax exemptions should be evaluated not only on revenue decisions but also on their economic impact.

The Hon. Fifi Kwetey, the then Minister of Transport whose Ministry spearheaded this motion in Parliament justified the need for the tax exemptions. He said: “it is only a person who  is not looking at the future of a country who is constantly obsessed with revenue now. So, if we are making some of these sacrifices to forsake revenue today, in order to attain a situation where our ports would be the best in the whole of the sub-region, make us competitive across the sub-region and so on, that is the way to go.”

Ladies and Gentlemen, these were the words of the NDC in 2015. Do they no longer believe that tax waivers are beneficial for economic development? It seems contradictory to oppose the very measures they once advocated as crucial for attracting investment and fostering growth. Has there been a change in their perspective on the positive impact of tax incentives on our economy?

Government made a promise to the private sector and investors have come into the country to invest in critical areas. These tax waivers are a crucial tool for stimulating economic growth.

This is particularly important in highly competitive global markets where investors have multiple options. For instance, in the case of MPS, the tax waiver was instrumental in ensuring that the investment was made in Ghana rather than in neighboring countries like Ivory Coast.

We also want to make it clear that these Tax waivers are not just for foreign investors. They are going to help local businesses expand and become more competitive. The reduction in the tax burden will lead to expansion, increased productivity and innovation which is going to create more jobs for the unemployed youth.

I want to take this opportunity to urge our colleagues in the Minority to engage in constructive dialogue and reach a beneficial agreement which will ensure the smooth running of Government business.