Chief Government Officer-Ghana Funding Promotion Authority (GIPC), Yofi Grant, has raised considerations concerning the harassment of foreign-owned companies by tax officers from Ghana Income Authority (GRA).
He lamented that every day at the least three to 5 foreign-owned companies go to the GIPC workplace – a state entity mandated to market and promote investments alternatives to each native and overseas buyers – to complain about fixed harassment attributable to various tax prices and insurance policies
Talking as a panellist on the Canada-Ghana Chamber of Commerce (CANCHAM), Mr. Grant warned that the fixed harassment, mixed with investor considerations comparable to unfavourable tax insurance policies, trade fee fluctuations and inflation, has change into a significant obstacle to present companies within the nation.
At this fee, the GIPC boss mentioned, it has nice potential to undermine the economic system’s attractiveness as an funding vacation spot.
That is significantly worrying, as overseas direct investments to Africa have decreased considerably submit COVID-19.
“The GIPC is worried concerning the unfavorable impression of tax harassment on overseas buyers’ confidence within the Ghanaian economic system. We urge the GRA to handle these considerations and guarantee a extra conducive enterprise setting for all buyers,” he appealed.
The GIPC CEO advocated a collaborative strategy to resolving tax-related points, making certain that buyers obtain truthful therapy and selling a steady enterprise setting.
Mr. Grant’s attraction is well timed. The home financial panorama has been considerably impacted by tax insurance policies applied since 2017. Buyers and companies are grappling with excessive rates of interest on loans from monetary establishments, native forex volatility and excessive inflation – together with different nuisance taxes that hinder enterprise development and sustainability
Excessive taxes result in decreased shopper spending and enterprise funding, which in flip can lead to decrease general financial exercise. This lower can dampen financial development, decreasing the whole tax income collected by authorities.
How financial local weather pressured out multinationals
Addressing the impression of tax harassment and different tax coverage implications, the GIPC CEO highlighted that the latest development of multinational manufacturers like Glovo, Nivea, Recreation, Jumia Meals and Unilever exiting the market could be attributed to the nation’s unfavourable financial local weather.
“Put up COVID-19, Ghana’s unstable financial state of affairs has pressured quite a few worldwide firms to maneuver all or a portion of their operations to our neighbouring nations, particularly Cote d’Ivoire. However the nation’s abundance of pure assets and usually steady political local weather, a number of financial difficulties have resulted within the departure of some industries’ necessary gamers,” he mentioned.
The cedi’s fluctuating worth has considerably impacted revenue margins, particularly for companies that depend upon imports of uncooked supplies for manufacturing.
The panel, whereas acknowledging the excessive enterprise working prices and taxation, urged overseas buyers to familiarise themselves with the varied tax rules and guarantee all their operations are inside remits of the regulation.
The GRA was additionally urged to search out revolutionary methods of accumulating excellent taxes from companies with out often displaying up at their doorsteps.