As investors in the capital market wait for an amendment to taxes imposed on capital gains, a tax analyst, Abdallah Ali-Nakyea has urged the Ministry of Finance to speed up the processes to remove the provision since the delay is causing the country to lose more money.
According to him, issues of taxes are critical to revenue collection, hence every delay in the process is a loss of revenue to the state since investors will be reluctant in enlisting on the Stock Exchange.
Some stakeholders in the stock exchange were this year shocked when the New Income Tax Act, 2015 imposed taxes on capital gains at the Ghana Stock Exchange.
The move was seen as setback to the already struggling stock exchange market since other stock markets in the region such as the Nairobi Stock Exchange and the Johannesburg Stock Exchange did not tax capital gains.
Speaking to Citi Business News, tax analyst Abdallah Ali-Nakyea stated that it is imperative to deal with the issue with a certificate of urgency. “I think tax issues should not be treated as normally in the sense that it affects government inflow, it affects businesses, it affects the economy. If there is uncertainty, businesses will be affected. People will move their businesses out,” he warned.
According to him, investors are baffled why the government will impose taxes on capital gains when the main competitors in the region have not imposed taxes on capital gains.
“I think the investors have a case when they complain. I also know the Ministry of Finance has heard them and doing something about it. If you look at the Nairobi Stock Exchange and the Johannesburg Stock Exchange there are no taxes on capital gains.”
He explained that taxes are intended to generate revenue to build infrastructure for development.
“So if now businesses are uncertain and reluctant to invest due to taxes then it is counterproductive. I think the government must treat this particular issue of taxes on capital gains with a certificate of urgency,” he argued.
Mr. Ali-Nakyea maintained that the current Tax laws of the country is generally favourable but must periodically be reviewed to input the ideas of business owners who measure market responses throw demand and supply.