Parliament
Parliament on Tuesday approved a
$832 million tax waiver for the Meridian Port Services limited for the
expansion of the Tema Port.
Meridian Port Services which is
funding the project under a public-private-partnership (PPP) program, is one of
three companies involved in a joint venture with the Ghana Ports and Harbors
Authority (GPHA) to undertake the Tema Port expansion.
The other two companies are Bolloré
Africa Logistics and APM Terminals.
Minority contest waiver
The Minority in Parliament earlier
kicked against the tax waiver which is almost two- thirds of the actual cost of
the project which is US$1.5billion.
The $832 million tax waiver
requested by the Finance Ministry will see Meridian Port Services receiving
concessions on VAT, NHIA Levy, Custom duties, Corporate and withholding taxes.
Speaking to Citi Business News
after Parliament approved the waiver the Member of Parliament for New Juaben
South and Member of Parliament’s Finance Committee, Dr Mark Assibey Yeboah said
government has been shortchanged in the provision of the tax concession.
“These are private people engaged in
a purely private business venture. And now they come to government that we have
to give them tax wavers. 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,” he added.
He contends that the amount is too
huge to be given out to a private entity engaged in a project that will accrue
more profits to it than to the state and says the tax concessions given to the
company are not justifiable.
“Port expansion, railway, these are
viable and I am saying these are the kinds of things that you expect government
to borrow money and do by itself. Because when you do this one the returns
and everything goes to the government instead of building community day
schools. You borrow money to build community day schools where only the people
who live in that vicinity can school.”
Government justifies waiver
But a Deputy Minister of Finance,
Cassiel Ato Forson disagrees.
“We are not just sitting down and
granting tax exemptions. We agree that the tax exemption has a percentage to
revenue is quite big, but again, I have always argued that countries grant tax
exemptions. Are you comparing how much we grant as a percentage to GDP to
our peers, are you comparing it to that of our neighbours?”
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Cassiel Ato Forson
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He noted that “countries like
Burkina Faso, Cote D’lvoire are attracting investment by giving them tax
exemptions.”
“Are we going to say that because
the name of taxes of future investment you are not going to grant tax
exemptions so those investments are going to leave your shores to another
country?What MPS had a choice to do this here or Ivory Coast or go to
neighbouring countries?”
Cassiel Ato Forson fears if
government fails to grant the concession the company may move elsewhere.
“Failure to probably grant it may
mean that they may go to another place. So you are not only granting tax
exemptions on the back of revenue decision, but you should look at the economic
impact the country will actually benefit from. I think overall, if you are
to look at it carefully, I think this is something the state is going to benefit.
Ghana will gain, both on the economic front and revenue front. 5.71 billion
revenue flow for twenty years is quite a lot of money.”
Port expansion gains
The $1.5 billion project, which will
take four years to complete, will involve the building of four deep water
berths and an access channel to accommodate larger vessels with high capacity
equipment.
This will create the largest cargo
port in West Africa, and one of the best in Africa, with a capacity of 3.5
million 20-foot equivalent unit (TEU) per annum.
Director-General of the Ghana Ports
and Harbours Authority (GPHA), Richard Anamoo, ealier told Citi
Business
News the project when completed, will accommodate larger container vessels,
increase container handling capacity and boost general productivity at the
port.
The Ghana Ports and Harbours
Authority has said about 5,000 jobs will be created as a result of the project.
The expansion work, the first of its
magnitude since the port’s construction in 1962, will also come with a railway
terminal for the movement of containers by rail to and from the port.
By: Vivian Kai Lokko/Duke
Mensah/citibusinessnews.com/Ghana
[Publisher #Djashtogbeone]
Parliament
on Tuesday approved a $832 million tax waiver for the Meridian Port
Services limited for the expansion of the Tema Port.
Meridian Port Services which is funding the project under a public-private-partnership (PPP) program, is one of three companies involved in a joint venture with the Ghana Ports and Harbors Authority (GPHA) to undertake the Tema Port expansion.
- See more at: http://citifmonline.com/2016/06/08/parliament-approves-832m-tax-waiver-for-tema-port-expansion/#sthash.oAeGulCX.dpuf
Meridian Port Services which is funding the project under a public-private-partnership (PPP) program, is one of three companies involved in a joint venture with the Ghana Ports and Harbors Authority (GPHA) to undertake the Tema Port expansion.
- See more at: http://citifmonline.com/2016/06/08/parliament-approves-832m-tax-waiver-for-tema-port-expansion/#sthash.oAeGulCX.dpuf
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