Management of the Ghana Free Zones Authority has defended the 10-year tax holiday enjoyed by companies under the country’s free zones.
Business analysts have criticised the huge tax exemption enjoyed by free zones companies, arguing it undermines the country’s revenue mobilisation efforts.
In their view, considering that the country is struggling with revenue collection, the tax exemption period should be reduced to either seven or five years.
However, Chief Executive of the authority, Michael Okyere Baafi, has disagreed, stating the country rakes in a lot more within the ten year period.
But CEO of the authority, Kofi Baafi disagrees.
“Looking at the expertise that these multinational companies bring into the country… I believe we are raking in more than what we lose in the tax holiday. They bring skills, they bring technology. They bring investment which cannot be quantified or equated to the tax holiday,” he said on 3FM on Friday.
Speaking on the Sunrise morning show, he called on local companies to take advantage of the tax incentives and exemptions and register.
“The free zones environment [is] opened for all including local entities. We want the local companies to also enroll and invest more into the Ghanaian economy” he advised.
Currently, there are 201 companies in the free zones, with only 34 local companies.
The programme is designed to promote the processing and manufacturing of goods through the establishment of export processing zones, and encourage the development of commercial and service activities at sea and airport areas.
Companies operating under the free zones programme are entitled to both monetary and non-monetary incentives, including 100 per cent exemption from the payment of income tax on profits for 10 years, which will not exceed eight per cent thereafter.
The companies also enjoy total exemption from the payment of withholding taxes from dividends arising out of free zone investment.
By Grace Asare|3news.com|Ghana