Initiate tax reforms to attract investments – US Ambassador

The US Ambassador to Ghana, Robert P. Jackson, has called for reforms to the country’s tax policies if the Nana Addo Dankwa Akufo-Addo government wants to spur growth of the economy on the back of the private sector.

Ambassador Jackson argued that although the recently announced tax reliefs are geared towards the growth of the private sector, it is important for the government to not only widen the tax net but introduce reforms that will reward firms that add value to raw materials especially cocoa and cashew before exporting them.

In an interview with the B&FT in his office, ahead of the United States of America’s National Day to be celebrated on July 4, 2017, Ambassador Jackson described as backward, the practice where companies who add value to raw materials before exporting or selling on the market pay more taxes than the ones who only put on the market items in their raw form.

“So, you need to widen the tax net for sure, however if you are trading cocoa and you are someone who is buying cocoa and making it cocoa pasted chocolates, your taxes are lesser than my taxes, that’s backward.

I think, I should be rewarded for producing something and adding value to it and I am not saying you should be penalized but I certainly shouldn’t be taxed at a higher rate which is currently the case,” Ambassador Jackson said.

He said it was essential the country moved away from rewarding only producers as he has noticed that, people are rewarded more for trading cocoa and cashews than they are for producing and adding value.

Ambassador Jackson further stated that: “the tax policy needs to change, and if government really wants one factory in every district, it needs to make available space. Land issues, which chiefs control, are very important as I think most chiefs will want factories in their areas. Translating that into setting aside a specific area that everyone can agree upon can be difficult.

Here in Accra, we believe the textile sector can be expanded greatly. We’ve suggested to the Ministry of Trade areas that, should and could be set aside for more textile production and government is looking at that, and I hope that they’ll work on it sooner rather than later,” he added.

On investment inflows from the US into Ghana, he explained that, on average, the US has been providing about US$260 million dollars for the business investment in Ghana.

According to him, these investments are largely in the energy sector through the Millennium Challenge Corporation (MCC), while about US$75 million has gone to the health sector especially for the combatting of malaria while some US$38 million have also been invested in the agriculture sector among others.

Mr. Jackson who described the US-Ghana bilateral relations as an excellent one said: “We have a strong relationship in so many areas. We have been friends of Ghana before Ghana’s independence and over the last 60 years we have been great partners.”

GB&F

Source: thebftonline.com

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