The majority caucus responds to minority criticism regarding tax exemptions in parliament

Alexander Afenyo-Markina

The majority caucus in parliament has responded to minority criticism of the government’s tax breaks for businesses under its one-district, one-factory policy.

The minority raised concerns about $300 million in tax breaks granted to 42 companies, citing a potential negative impact on the country’s economy.

However, during a press conference in Accra on Thursday, May 30, 2024, Majority Leader Alexander Afenyo-Markin defended the government’s action, pointing out that the previous Mahama-led administration approved an even greater tax exemption in 2016. According to Afenyo-Markin, the Mahama government granted Meridian Port Services a substantial tax exemption of $982 million, which was later reduced to $832 million following the intervention of then-minority members of the NPP on the Finance Committee.

Afenyo-Markin criticized the previous administration for what he called “the most outrageous tax offer ever seen in Ghana” and highlighted the intervention of minority NPP members to reduce the amount.
He emphasized that Meridian Port Services was exempt from corporate income tax for 10 years and received a reduced corporate income tax rate for an additional five years. Additionally, for two decades the company has benefited from tax breaks on dividends to shareholders.

The Majority Leader called for the extension of similar benefits to domestic businesses and urged Parliament to address the issue.
He said tax exemptions play a key role in stimulating economic growth and attracting investment to the country.

In 2021, the Ministry of Finance initiated processes to provide tax exemptions of approximately USD 335,072,712.13 to 42 companies under the One District One Factory initiative. Sentuo Oil Refinery Limited received the highest tax exemption amount of USD 164,633,012.00.

The tax exemption debate continues to spark debate in Parliament as both sides present their arguments on the impact and necessity of these incentives for businesses operating under government policy.

Vincent Kubi