Source: B&FT Ghana - The Parliamentary Select Committee on Finance has recommended for the approval of the House a proposed US$185million direct and indirect tax waiver for contractors working on various airport projects in the country.

The Committee, in its report seen by the B&FT, recommended for the House to "approve a waiver of US$185million for a period of five years for the Ghana Airports Company Limited."
"The Committee having carefully examined the referral is of the view that the approval of the request is necessary to improve GACL’s ability to develop the required infrastructure for the country’s airports. Additionally, the request is necessary to allow GACL pay for loans already contracted for infrastructural works at various airports across the country," the report said.

Construction companies, M/S Mapa Insaat Ve Ticaret (Contractor), M/S Constutora Queiroz Galvao S.A(acting through its branch, Construtora Queiroz Galvao S.A Sucursal Gana), PW Ghana (Mourne Ghana) Amandi Holding Company Limited, Amalgamated Designs and Bans Consults among others who have project agreement with the GACL, are expected to benefit from the proposed tax waiver when approved by Parliament.

The GACL secured a loan of US$250 million to undertake the construction of a new terminal known as Terminal 3, at the Kotoka International Airport from a consortium of banks led by Ecobank Capital.

The company later also secured another US$150 million in funds on the strength of its own balance sheet to fund the Ho Airport project, as well as the rehabilitation of Kumasi Airport. Part of the said amount is also being expended on rehabilitation of the Sunyani and Wa Airports.

The repayment projections for the loans were made on the assumption that GACL will not pay tax for the duration of the facility.

The Committee, therefore, held that there was the need to exempt GACL from payment of all applicable taxes to free resources for the repayment of the loan.

Management of GACL, following the promulgation of the Airport Tax Amendment Act in 2013 which allows the GACL to retain 100 percent of its revenues, turned to private capital to improve aviation infrastructure in the country.

Prior to amendment of the Act, 60 percent of all airport taxes went directly to the Ghana Revenue Authority to support the national budget while GACL retained just 40 percent.

Growing passenger throughput, increasing number of French-speaking West Africans in Ghana, and the relatively peaceful nature of the country are some of the major lures for airlines in the region.

The domestic transit passenger volumes increased from 14,000 in July 2015 to over 22, 000 in July this year. International passenger throughput also hit 1.6million this year.
 


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