ABSTRACTGhana is struggling to mobilize adequate resources to address her developmental challenges. The growing trend of government giving income tax revenues away in the form of tax incentives is nerve-wracking especially when government is not able to address the inequalities and other socioeconomic needs for which the tax system is …
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ABSTRACTGhana is struggling to mobilize adequate resources to address her developmental challenges. The growing trend of government giving income tax revenues away in the form of tax incentives is nerve-wracking especially when government is not able to address the inequalities and other socioeconomic needs for which the tax system is meant to address. This study examined the impact of Ghana’s tax exemption regime on Ghana’s economy using annual data for the period 2008 to 2019. The results showed that the trend annual income tax exemptions have been oscillating rising steadily from 2008 to 2010 and sharply from 2010 reaching its peak in 2011 and then declining sharply between 2011 and 2013. Annual trade tax exemptions however fell between 2008 and 2009 and rose steadily reaching a peak in 2012. It then declined sharply between 2012 and 2013 but then started rising from 2015 to 2019. Again, the result showed a weak positive but insignificant relationship between tax exemption and foreign direct investment, tax revenues and service value added and a weak negative but insignificant relationship between tax exemption and manufacturing value added. It concluded that growth in tax exemption had no significant association with the economic measures used and recommended that the quantum and nature as well as application of tax exemption in the manufacturing sector should be reconsidered in order to achieve the purpose for which the exemptions are granted.
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