Multinationals Overuse Ghana’s Tax Incentives
February 27, 2014 Taxation in Ghana
ACCRA – Ghana’s reliance on tax incentives is draining the national coffers while hurting the country’s standing with its neighbors in the region.
The preliminary results of a new study being conducted by Action Aid Ghana are showing that since the year 2000 the national government has spent approximately USD 1.2 billion annually on tax incentives for multinational businesses in an attempt to attract greater levels of foreign direct investment.
The new data was presented by Action Aid and the Integrated Social Development Center at a national conference on February 26th aimed at encouraging the media to take a stronger stance against some of the perceived exploitation of the country by international corporations.
The results of the study indicated that the amount given out each year in the form of tax incentives by the government of Ghana to multinational investors and businesses is approximately equal to half of the annual education budget for the entire country, and diverting the funds away from corporate assistance could help provide primary schooling to as many as 57 million kids.
Action Aid conceded that these tax breaks play a very important role in attracting investment into the country, but they also noted that there is currently too little oversight or accountability on how the preferable treatment is awarded.
Describing negative effect of persistently providing excessive breaks to international investors, the Director of Action Aid Ghana Adwoa Kwateng-Kluvitse said that such economic politics “…undermine the harmonisation of trade and investment regimes across the sub-region.”
Photo by: Ben Sutherland