The majority in Parliament has used its numbers to grant a GH¢10.46m tax exemption to Tata Consultancy Services Limited, an Indian IT company, as their colleagues on the other side opposed the motion.
According to the minority, their disagreement stems from principles, given that just last year, the now majority opposed a similar move by the now minority for some companies under the 1D1F.
At the time, the then minority, now in the majority, particularly led by the current Finance Minister, Dr Cassiel Ato Forson, argued that tax waivers to those companies would have serious fiscal implications for the country.
The minority was thus surprised that the group that vehemently opposed a similar decision and ensured it did not hold is ironically doing the same.
OPPOSE
The Minority Chief Whip, Frank Annoh-Dompreh, spoke for the record that the decision was solely by the majority, with his side dissenting, a position they made clear at the committee level.
“Speaker, let the record reflect that the same was discussed at the committee and that it was a majority decision.
“And our dissenting view is premised on principle. Speaker, last year, I witnessed the passion with which he (the Finance Minister, as the minority leader then) spoke against exemption generally.
“And even at the point when we’re bringing exemptions that were related to 1D1F, with the intention of creating jobs, our friends held the red flag and it was all over the country. I don’t know what has changed. We are opposed.”
He continued that, “We want to appeal to our colleagues. They should stay on principle. He had expressed his principle last year when he was then minority leader; now he’s finance minister. One would have thought that he’s empowered to ensure that his principle that he believed in will be put into force.
“Now he is picking and choosing. When it is about TATA, he is bringing the exemption. When it is about something else, we hear a different story. It is disappointing.”
MINISTER
Wrapping up debate on the motion, the Minister for Finance, Dr Cassiel Ato Forson, gave the chronology of events leading to the tax waiver. He stated that the previous government had signed a contract granting a 20% tax waiver. He indicated that though he did not sign the deal, he was in Parliament “to ensure that the right thing is done. I am cleaning your mess.”
The minister said the previous government failed to present the deal to Parliament, though TATA is a foreign company, a reason he had to take the step to right the wrong.
“Mr. Speaker, apart from that, for this tax obligation, the Ministry of Finance cannot sit at the office and approve it because if you look at the wording in the addendum, it further states that the GRA shall be responsible and do all such acts required for obtaining such approvals from the Parliament of Ghana. And immediately notify TATA Consultancy Services of such approval. Mr Speaker, I’m only doing my work. I’m only doing what I have been asked to do. Mr Speaker, I thought my colleague would rather applaud me.”
RENEGOTIATION
Dr Ato Forson mentioned the outcome of the renegotiation, saying that he has been able to reduce the cost of software and related items from $25.3 million to $20 million, saving $5.3 million on one line alone.
He also noted that the downwards hardware and related items have been reduced from $15 million to $13.7 million, saving the government over $9 million.
The ITAS software, the minister told Parliament, has been endorsed by the IMF, which says that “it is good software that will work for the people of Ghana.”
Meanwhile, Dr Cassiel Ato Forson denied the claim that his position on tax is “unwavering”, and “everyone knows my views about tax exemption,” insisting that he was doing the job started by the previous government.
OBLIGATION
On May 28, 2024, the GRA signed a contract with Tata Consultancy Services Limited, but the process, whose competitive bidding was done in January of the same year, was cancelled.
On November 4, 2024 an addendum signed by TATA Consultancy Services Limited and GRA included the 20% withholding tax exemption from January 1, 2025 till the end date.
ITAS will provide a 360-degree view of taxpayers’ obligations and interactions to enable risk-based compliance management, timely enforcement and targeted taxpayer support, [for] the domestic tax administration system with existing customs platforms, such as ICOMS.
It will also integrate with the registrar of companies for GRA to be able to know who is behind every single transaction.
