MPs back €34m tax exemptions
Parlaiement has approved a raft of tax concessions for a Belgium construction firm, Viabuild Africa, which will handle the construction of selected roads in Sekondi and Takoradi in the Western Region, and another company to handle the Tema-Akosombo Junction (63.6km).
The request for waiver of €6,840,345 for the Belgium company and that of €27,240,887 for the Tema-Akosombo Junction project, being part of the Eastern Corridor Road, were presented to Parliament on February 8, 2022.
The tax exemptions include an Import Duty, Import VAT, GETFund Levy, Import NHIL, EXIM Levy, Special Import Levy and COVID-19 Levy.
For Sekondi-Takoradi, the project, according to the government, seeks to expand the capacity of the road networks within Sekondi-Takoradi metropolis to reduce congestion and facilitate vehicular movement within the area.
In line with the objective to facilitate trade and improve road infrastructure in the city, government secured a Crendendo Covered Buyer’s Credit amounting to €72,150,000 from a Belfius Bank NV with KBC Bank NV Arrangers and Belfuis Bank as Agent to finance the construction of selected roads in Sekondi and Takoradi township.
The government also entered a Design-Build Contract Agreement with Viabuild Africa for an amount of €65 million for the design and construction of the projects. Both the financing and the commercial agreements require the waiver of applicable taxes on material and equipment to be imported for the project.
In the case of the Eastern Corridor Road, government said it is currently undertaking a number of projects to upgrade sections of the road in line with the agenda to improve road infrastructure in the country.
According to government, the Eastern Corridor is strategically relevant, especially for freight movement within Ghana and its neighbouring landlocked countries, including Burkina Faso, Mali and Niger.
The corridor also serves as the North-South trade corridor, by providing a shorter access from the port of Tema to the northern zones of the country, and improving mobility between the Greater Accra, Eastern, Oti, Volta, Northern and Upper East regions of Ghana.
In line with government’s overall objective to facilitate trade and improve road infrastructure along the corridor, government secured a credit facility amounting to €282,702,097.38 from a consortium of financial institutions with export credit guarantee support from Euler Hermes to finance the construction of the Eastern Corridor Road network – Lot 1: Tema-Akosombo Junction.