A SITUATIONAL ANALYSIS OF THE TAX EXEMPTIONS AND INCENTIVE REGIMES IN GHANA

INTRODUCTION
Tax incentives can be defined as deliberate concessions, provisions and conditions enacted into law, reducing tax and lessening the tax burden in targeted areas to encourage, boost or sustain investment for growing the economy. In principle, a tax incentive is an aspect of a country’s tax code designed to encourage companies or people to do something that will help the country’s economy. Tax incentives are several tax policies that allow deductions, exclusions and exemptions or provide for lower rates that reduce the tax liability of selected economic entities with the intention of influencing and attracting flows of capital into preferred locations and sectors of the economy or specific investment activities such as financing infrastructure projects and research and development.
With tax incentives, the beneficiaries are able to enjoy a financial benefit through higher income or profit and/or lower cost of investment through reduced tax liability or other concession. In order to attract the desired investment to a country, increase employment, draw higher number of capital transfers, help develop research and technology and/or improve them to less developed areas while protecting the tax base and revenue mobilization efforts, the tax incentives regime must be properly designed, adopted and implemented. The general objectives of tax incentives comprise the following:
1. To attract investors to locate to more remote and economically less developed regions of a country
2. To attract investors to establish labour-intensive industries or employ particular categories of workers or generally reduce unemployment in a country
3. To attract investors to bring in advanced technology or research and development activities into a country or certain sectors of the economy
4. To attract export-oriented investment
5. To provide a discrete environment in which enterprises can import machinery, components, and raw materials free of customs duties and other taxes for assembly, processing or manufacturing with a view to exporting the finished product.

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A Situational Analysis of the Tax Exemptions & Incentives Regime in Ghana Final