General News of Wednesday, 15 November 2017
The government has announced that privately-owned universities will be granted some tax reliefs thereby enabling them to thrive and admit more students.
Making the announcement in the 2018 budget read in Parliament today, [Wednesday], November 15, Finance Minister, Ken Ofori-Atta, revealed that the private institutions will no longer be required to pay corporate income tax.
According to the Minister, investing in the country’s private educational institutions would significantly boost the reputation of the sector, potentially making the country an attractive destination for investors.
“The education sector represents a high growth potential with multiplier effects on the economy as confirmed by a recent “Country Private Sector Diagnostic” study by the World Bank Group. This is borne out by the rapid growth in privately-owned and managed universities as well as in the inward flow of students from the West Africa sub-region,” he said.
The government believes that, giving the institutions tax breaks will enable them focus on improving and maintaining their facilities in order to attract more students from all over the continent.
“It is government’s intention to support the sector in order to position Ghana as the premier higher education hub of the sub-region and to attract critical foreign direct investment into the sector.
In view of this, and also as part of government’s strategy for the long-term development of a local human capital base fit for a changing world, we will grant relief from corporate income tax paid by privately-owned and managed universities to the extent that profits are ploughed back to expand or maintain facilities.”
Following complaints by private Senior High School owners to the effect that they are losing their investments due to the implementation of the free SHS policy, which has led to low admissions, the Finance Minister said ” We would also work to do the same for privately owned SHS in the near future.”
Incentives for young entrepreneurs
The New Patriotic Party (NPP) administration has consistently indicated its commitment towards supporting young business owners.
President Nana Addo Dankwa Akufo-Addo earlier in July set up a 100 million dollar package to fund the National Entrepreneurship and Innovation Plan (NEIP).
Young entrepreneurs to get tax holidays
The government has given another strong indication by revealing that young Ghanaian business owners, will be granted tax holidays of up to five years based on the number of people they employ.
“As a further commitment to creating a supportive ecosystem for young Ghanaian entrepreneurs of age 35 years and below who start their own businesses, government will, through the National Entrepreneurship and Innovation Plan (NEIP), grant tax holidays based on the number of persons employed by a start-up or early-stage business,” he said.
“A preferential tax rate of between 3 to 5 years will be granted after the tax holiday. They will also be allowed to carry forward losses for five years.”