Month: July 2013

Members of Parliament on Tuesday engaged in a heated debate over a Communication Service Tax (Amendment) bill, 2013 before it could be read the second time.

This is because the minority objected to the urgency of the bill purported by the Finance Committee as well as some issues in the memo which they claimed lacked clarity.

The bill was presented to Parliament and read the first time on June 28, 2013 and referred to the Finance Committee for consideration and report in accordance with article 174(1) of the 1992 constitution and order 169 of the standing orders of Parliament.

The bill seeks to amend some provisions in the communications service tax Act, 2008 (Act 754) to clarify the scope and coverage of the tax and include interconnection services within the tax base. It is divided into eight clauses.

Mr Ato Forson, Deputy Minister for Finance moved the motion for the bill to be read.

Parliament passed the Communication Service Act, 2008 (Act 754) to impose a six per cent charge on communications service usage. Tax was an excise tax intended to raise additional revenue from communication services, provided by mobile operators to their customers.

The rate of 6 per cent was arrived at in order to remove the surging nature of the tax with regards to interconnection services. Some provisions in the Act however, created compliance challenges in the telecommunications companies in respect of the application of the tax to interconnection services.

The proposed amendment therefore seeks to bring clarity to the various provisions so as to improve the administration of the tax.

Dr Anthony Osei Akoto, who was first to raise the objection said the committee should let the house know what the gaps are in the bill and why it was said to be urgent.

Mr Paapa Owusu Ankoma noted that the bill had been there for five years and nothing is stated as to why it was urgent thus members needed to time take look at the bill properly and make the necessary corrections as the memorandum was misleading.

He appealed to members not to accept the bill as urgent so that it could go through the normal process in order to improve upon it.

Mr Fredrick Opare-Ansah, Member for Suhum said in this country no user is charged a levy for use international calls so what levy are placing on users “what sin they committed.”

Mr Joseph Yeleh Chireh, member for Wa West, urged members to support the report and the second reading of the bill adding that it came to the House late.

Mr Alban Sumani Bagbin, Member for Nadowli Kaleo, said there was a challenge with the bill due to certain issues in both the memo and the report which were not clear and needed to be stated clearly before.

He said the bill before the law was draft and a lot of amendments were needed to streamline it.

Dr Dominic Akuritinga Ayine, Deputy Attorney General and member for Bolgatanga East the debate over the bill was a contravention article 106 (13) of the 1992 constitution, saying once it was an urgent bill there was no need to debate it.

Dr Benjamin Kunbuor, Leader of government business and member for Nandom said the memo had set out everything out clear in terms of legislation and added that when the House gets into the subsequent states of the bill the various amendments needed to clarify whatever issues that are claimed to be lacking would be included.

Mr Edward Doe Adjaho, Speaker after listening to all the concerns raised from both minority and majority moved the motion for the bill to be read the second time for the House to begin consideration Wednesday, July 3, 2013.

Other papers were also presented, including, reports of the Finance Committee on Communications service tax (Amendment) Bill, 2013, Value Added Tax (Amendment) bill 2013, Special Import Levy bill 2013, National Fiscal stabilization levy bill, 2013, Customs and excise (Duties and Other Taxes) (Amendment) Bill, 2013.

The Anti-Terrorism amendment) bill, was also read the first time.

GNA

Members of the Parliamentary select Committee on Water Resources Works and Housing have expressed satisfaction at the completion of works on the Keta Sea Defense projects.

They have also commended the progress of work so far on the Ada Sea Dredging project.

The Keta project was contracted to Amandi, an Italian Company and began three years ago, covering three communities- Anyanui, Atorkor and Dzita at a cost of 41 million Euros.

The members led by the Chairman of the Committee and Member of Parliament for Shai Osudoku, Mr David Assumeng Tetteh, toured the sites to inspect the work so far carried out.

The Ada Sea dredging is awarded to International Marine and Dredging Consultants at a cost of 160 million Euros.

Mr Hubert Owusu Ansah, of the Ministry of Water Resources Works and Housing explained that the people of Anyanui were cut off before the project but with the completion of the project it has facilitated commercial and fishing activities.

He said the community school was provided with 14 computers and two teachers and a playground.

Mr Francisco Aracil, Site Engineer at the Ada site said seven groynes with increasing lengths spread of more than 4.7 kilometres of the project had been used in the phase one.

He said the phase two was initially programmed to be completed in December 2013 but the pace of work is faster and would be concluded soon.

He said the project would lead to the stabilisation of the coastal lines and the beaches, minimise risks of flooding and also raise economic benefits through tourism.

Mr Assumeng-Tetteh, urged the Ministry to build the capacity of local contractors so that in the future the country could rely on them.

GNA

Parliament has approved the re-introduction of the National Fiscal Stabilisation Levy (NFSL) for a period of 18 months to raise funds for fiscal stabilisation of the economy.

The NFSL imposes five per cent toll on the profit-before-tax of some specified companies and institutions.

Clause Five of the NFSL Bill mandates the Commissioner-General of the Ghana Revenue Authority (GRA) to prepare a provisional assessment in respect of the companies and institutions liable to pay the tax.

Clauses six and seven deal with the time for the payment of the levy and the powers of the GRA to collect the levy.

Clause Eight mandates the Commissioner-General of the GRA to pay all money collected under the Act into the Consolidated Fund.

The government, in an attempt to ensure fiscal stability, introduced the National Fiscal Stabilisation Act, 2009 (Act 785) in the second half of 2009, to raise funds for national development.

The Act was repealed in late 2011, following the stability of the economy.

However, the implementation of the Single Spine Salary Scheme (SSSS), among other things, have led to budget overruns in many sectors of the economy.

Expenditure on the SSSS also threatens to crowd out investment in critical sectors of the economy.

Therefore, according to the government, there is the need to re-impose the levy to help generate revenues to support the shortfalls in the budget.

The estimated revenue expected from the imposition of the levy is Gh¢ 88,000,000.

Presenting the report of the Finance Committee before the House, the Vice Chairman of the Committee, Mr Gabriel Kodwo Essilfie (NDC, Shama), said the committee, in its deliberations considered the NFSL Bill to be of an urgent nature and must be taken through all the stages in one day in accordance with Article 106 (13) of the Constitution and Order 119 Standing Orders of the House.

He said the committee, in its deliberations with the minister of Finance, learnt that the rate was pegged at five per cent because the government did not want to overburden businesses with high rate of taxes.

He said the Minister told the committee that the economy was recovering from the effects of the water and energy crisis and any high tax rate was likely to adversely affect businesses and eventually slow down the recovery of the economy.

“The five per cent proposed levy seems reasonable under the circumstance,” he
said.

Mr Essilfie said the committee held the view that although the proposed tax was generally not high, the government could generate more revenue if areas, other than the “traditional sources” were explored.

“The committee, therefore, calls on the ministry to broaden the tax net to rope in other sectors of the economy,” he said.

The Minority in Parliament is urging government to re-consider its decision to impose a 1% levy on fertilizers, energy saving bulbs, outboard motors and generators.

The government is also seeking to impose a 20% import duty on telephone handset and additional 5% stabilisation levy on the profit before tax of selected companies and institutions.

Parliament is currently deliberating on the bills under the certificate of urgency.

But presenting a report to the House, Deputy Chairman of the Finance Committee, Gabriel Essilfie, said although the Committee acknowledges government’s quest to raise revenues, it believes the proposed levy will increase the cost of fertilizers and ultimately lead to increased food cost.

“The levy further has the potential to impoverish the many subsistence crop farmers, most of whom are below the poverty line. The Committee, accordingly, proposes the deletion of the 1% levy on fertilizers”, he said.

Also, a member of the Minority and a ranking member on the Finance Committee, Dr. Anthony Osei-Akoto, wondered whether the government thought through the proposed amendments very well.

According to him, items covered under the Special Import Levy Bill were given zero tax ratings for a specific reason and did not think because government is looking for money it should attempt imposing a 1% tax on fertilizers.

He was unhappy with the proposal to tax energy saving bulbs and outboard motors. According to him, it is likely the ministries of Energy and Petroleum or Food and Agriculture were not consulted before the proposal was drawn.

The Speaker of Parliament, Edward Doe Adjaho is pushing for the development of a code of conduct to regulate the activities of members of parliament.

He is hopeful this will help members conforms to standards expected to them.

The leadership of the house is currently investigating the chairman of the Public Accounts Committee (PAC), Kwaku Agyemang-Manu for possible conflict of interest.

He is alleged to have written a letter to solicit sponsorship from local IT firm, RLG.

Addressing the house, Mr. Doe Adjaho says the code of conduct is long overdue and that it will help MPs to improve upon their practices and procedures in the house.

He stressed that his call “is not about any individual, it is about committees of the house and their practices.”

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