Debates of 1 Feb 2006

MR. SPEAKER
PRAYERS 10:15 a.m.
CORRECTION OF VOTES 10:15 a.m.
AND PROCEEDINGS AND 10:15 a.m.
THE OFFICIAL REPORT 10:15 a.m.
Mr. Speaker 10:15 a.m.
Order ! Orde r ! Correction of Votes and Proceedings for Tuesday, 31st January 2006 - Pages 1 - 7? - [Pause.] (No correction on the Votes and Proceedings.)
Hon. Members, are you in possession
of the Official Report for Thursday, 26th January, 2006? If you are, do you have any comments?
Mr. Evans Paul Aidoo 10:15 a.m.
Mr. Speaker,
column 151, the third paragraph, the name “Mr. John Gyetuah” should be deleted and replaced with “Mr. Evans Paul Aidoo.” I asked that Question and not hon. John Gyetuah.
Mr. Speaker 10:15 a.m.
Thank you; any
further confirmations? - [Pause.] Item 3, Questions -- Is the hon. Minister for Energy in the House?
Majority Leader/Minister for
Parliamentary Affairs (Mr. Felix Owusu-Adjapong): Mr. Speaker, I thought he should be in by now. I do not know -- we have been trying to get him on his phone but it is not working.
Mr. Speaker 10:15 a.m.
Hon. Members, we
shall defer this item and take item 4 -- Statements.
STATEMENTS 10:15 a.m.
Mrs. Juliana Azumah-Mensah (NDC - Ho East) 10:25 a.m.
Mr. Speaker, with your indulgence, I wish to make a brief Statement to congratulate the youths of Alavanyo and Nkonya in working tirelessly to bring lasting peace between the two traditional areas.
Mr. Speaker, this peace came about following a historic gathering in Ho, the Volta Regional capital, under the auspices of the West Africa Network for Peace Building (WANEP).
Mr. Speaker, it would interest you to know that this conflict started before Ghana gained political independence. After over 80 years of bloodshed, fear, pain and agony over the loss of precious lives, peace has finally prevailed between the two traumatized neighbours of Alavanyo and Nkonya.
Mr. Speaker, the Ho meeting was designed to harmonize the relationship between the combatants in one of the longest communal conflicts in Ghana.
The youths of the two areas vowed never again to allow the return of the era they termed “mutual slaughtering” of their people.
Mr. Speaker, it is heartwarming to know that the youths have resolved that the door on fear, mistrust, hatred and violence had been closed forever, adding that they had become emissaries of peace and goodwill.
Mr. Speaker, in a communiqué issued after the Ho gathering, the youths charged
their chiefs and opinion leaders to remain focused on the peace process which we all hope will be maintained.
I also wish to take this opportunity to call on my colleague politicians in and outside the area to use their positions of authority to help strengthen the existing peace initiative by the youth.
Mr. Speaker, the only way we can move forward as a nation is to give peace a chance, as we know that there can be no meaningful development without it.
Mr. Speaker, the numerous examples are around us to see; and we as a people should know that the most important thing we need as a country in order to progress and develop is lasting peace.
Mr. Speaker, it against this background that I think the youths of Alavanyo and Nkonya need to be commended for their effort in ensuring that peace is achieved between their peoples, and that the way forward is not in conflict, but in lasting peace.
Mr. Speaker, I want to seize this opportunity to appeal to the Government, chiefs and elders of the area, the District Assembly as well as non-governmental organizations to help restore economic and social activities in the area, as this will go a long way to engage the energies of the youths.
In fact, Mr. Speaker, these are the issues we would like the media to spend their time, energy and pens and on and to be seen as objective and development- oriented.
Again, Mr. Speaker, I also wish to say that the efforts of the youths of Alavanyo

MRS. AzUMAH-MENSAH] and Nkonya must be an eye-opener for all youths in other troubled spots across the country, as our meager and dwindling resources can no longer go into conflict resolution.

Mr. Speaker, as I speak now, my own constituency is one of these simmering trouble spots, which will hopefully not be catapulted into any of such atrocities of immense proportions. I take this opportunity to thank all and sundry who are working tirelessly to neutralize the situation for the sake of our people, especially the children. At the appropriate time, Mr. Speaker, I shall dutifully present a Statement on the security situation on my constituency/district to this House.

Mr. Speaker, with your permission, I would also like to pay glowing tribute to the following for their active involvement in all the processes leading to the restoration of peace in the area. The Most Reverend Francis Anani Lodonu, the Catholic Bishop of Ho Diocese, Dr. Livingstone Buamah, the Moderator of the Evangelical Presbyterian Church, and Mr. Emmanuel Bombade of WANEP, just to mention a few.

Mr. Speaker, at this juncture, it is important that I say special thanks to the youth of Alavanyo and Nkonya and, of course, the chiefs and elders of both traditional areas for their active and effective roles in bringing peace to their areas.

Mr. Speaker, I cannot end without wishing you and all hon. Members of Parliament a fruitful and productive 2006.

Thank you, Mr. Speaker.
Mrs. Grace Coleman (NPP -- Effiduase/Asokore) 10:25 a.m.
Mr. Speaker, I stand

to support the Statement on the floor. Mr. Speaker, I noticed that the hon. Member who made the Statement thanked almost all the people who had contributed to making this peace possible and I would also want to say that sometimes it is whoever is handling the issues that will either bring lasting peace or make the situation worse.
Mr. Speaker 10:25 a.m.
Hon. Member for Ho
West, do you have any point of order to raise?
Mr. F. Agbotse 10:25 a.m.
On a point of
correction. Mr. Speaker, I just want to correct my hon. Colleague on the floor. She is not the Member of Parliament for that constituency; the Members of Parliament for that constituency are sitting here -- they are the two Members of Parliament for the area.
Mrs. Coleman 10:35 a.m.
Mr. Speaker, I want
to thank my hon. Colleague but I have to say that it is usually whoever is interested that makes the peace possible; and I can say with all confidence that my sister has been concerned. I have just said that the ten years that I have spent in this Chamber, I have heard about the Alavanyo and Nkonya problem ten times and still the problem is there. It looks like we have issues of this nature all over this country.
Many of those conflicts started years ago, maybe decades. Perhaps with the new development, Members of Parliament should go in; and I believe that when they sit down and they make the youth feel that they are on their side and that they want lasting peace, we will achieve something.
Mr. Speaker, I want to add that it is by the efforts of the people of Alavanyo and Nkonya to make this peace last that the Government will feel that it should bring development programmes in the area. We know they just happened to stop fighting and we hope that it is going to be a lasting peace. But Mr. Speaker, we have said this over and over again, that they stop for a while and then they are back at it. Now we are saying that let us see peace and then we can call on the Government to do something for these people.
They want peace in their area and they want it also for Ghana and therefore they are willing to develop any projects that are brought there. So I am calling on the Government but I am also saying that the youth and the people of Alavanyo and Nkonya should show that they deserve to be given the help that will allow the area to develop. They should not just stop for a while and then go back to it. We want to say that it is now history, that now they do not wish to get back to it again.
So I want to congratulate them. I want
to congratulate everybody who has helped to make this possible and I would want to congratulate the youth of Alavanyo and Nkonya and to bring their attention to the fact that we have nowhere to go. Mr. Speaker, we have nowhere to go; Ghana is our land and that is where we will live and die. Even if we die somewhere, we have heard many times that when people die, they put them on a plane -- After all, they died in developed and beautiful countries, why were they not kept there even after their death? They wanted to come to their
country. This is our country; this is where we belong and this is the place where we should develop; we can only do it, as my sister said, when there is lasting peace in this country.
So Mr. Speaker, I want to thank my hon. Colleague and I wish that we will continue to settle all differences in all areas so that very soon we will not have the opportunity of even counting one or two that are still in force - I am talking about conflicts.
I want to thank you for your indulgence,
Mr. Speaker.
Mr. E . K . Bandua (NDC --
Biakoye): Thank you, Mr. Speaker, for the opportunity to add my voice to the Statement on the floor.
In fact, I think my hon. Colleague has taken the wind out of our sails, being one of the Members of Parliament for the area. But I want to say that this peace project was initiated by the Regional Coor- dinating Council and two committees are involved in managing the peace; these are the mediation committee and the joint consultative committee. In fact, these committees are doing a good job because the people themselves are involved in managing the peace process.
I think that is a very good and important issue. In fact, that has so far brought the issue down. As we are speaking now, the war has not totally ceased; the conflict has not been resolved; there is only an uneasy calm in the area; the peace process is still on course so there is the need for the Government to come in immediately because in fact, the committees which are working on the peace process are facing a lot of financial and logistic problems. As we speak now, policemen are stationed
in the area, but the logistics and monies and other things are being provided by the District Assemblies of the two constituencies which are involved in the conflict.
I think the burden on these District Assemblies is becoming too much and unbearable. I will appeal to the Government that if they want this peace process to be sustained and to continue, as we all expect, then there is the urgent need for the Government to come in immediately with resources to support these committees which are doing a very good work.
I also take this opportunity to congratulate the West Africa Network for Peace Building (WANEP). They are also deeply involved, the Clergy are also involved, the Catholic Bishop of Ho Diocese and the Moderator of the Evangelical Presbyterian Church are also playing key roles in the resolution of this conflict. So it is a joint process involving the chiefs, the people, the elders and the youth, including the Members of Parliament. We have been attending several meetings and last Thursday, I was at one of such meetings at Ho and a lot of things have been discussed but the problem that we are facing is financial. When people come for such meetings, t & t and other things that will be paid, it looks like the people are paying most of these things from their own pockets and I think that is not the best.
Secondly, there is the need for economic activities in the area to be reactivated; this can only be done if the area is opened up. The road network in the area is very bad so it prevents one from commuting between the two communities. In fact, if the road network is opened up, and street lights are provided in the area, the lingering fear among the people that prevents them from moving and interacting with each other

will be removed. If this is done, I think that there will be easy communication between the people and the fear that they entertain whenever they are moving along the route that joins the two communities will be removed.

I think that if the economic activities are also reactivated in the area -- These economic activities have gone down because of the war. I will appeal to the various NGOs in the country to try and come to the aid of these communities. In fact, if there are no economic activities in the area there will be more problem because we are told that the devil finds work for idle hands. But if the people are engaged in economic activity, I think they will have time and then they will not give much time to fighting among themselves.

I also wish to appeal to all the people who have interest in the area to provide any assistance that they think would be possible for them to provide. I believe that if the Government and various NGOs come to the aid of these two communities, the peace process would continue, and I believe that at the end of it all we shall see lasting peace in the area.

We want lasting peace and that is the more reason why I am appealing to the Government - and it is an urgent appeal - that now that there seems to be calm in the area - the calm is an uneasy one. But if the Government should take this opportunity, come to the aid of the people, provide street lights, open up the area by providing good roads, and re-activate the economic activity in the area, I think that the peace that we shall have in this area will be lasting and that everybody will be at ease.

Thank you very much, Mr. Speaker,

247 Statements 1February, 2006 248

MR. BANDUA] for the opportunity to contribute to this Statement.
Minister for Manpower Development, Youth and Employment (Mr. Kofi Ada) 10:35 a.m.
Thank you, Mr. Speaker, for the opportunity to contribute to the Statement on the floor. Mr. Speaker, I would like to commend the Member of Parliament for making the Statement and for bringing to the attention of the whole nation what the youth can do for us. Indeed, in making the Statement, the point has been made clear that the youth can lead elders in certain cases. And in this particular case, where the elders have failed to bring about peace, the youth have been able to initiate such process and conclude with the peaceful arrangements that we have there now.
Mr. Speaker, during the last recess, I had the opportunity to attend a gathering at Akatsi, where another group of youths were able to get the chiefs who were fighting over chieftaincy issues to come together to consider peace.
In the Northern Region too, there have been some instances where the youth have tried to spearhead the idea of bringing peace to the Northern Region, particularly with the Dagbon situation.
Mr. Speaker, in the past the National Youth Council had held various peace camps to try to promote the idea of peaceful co-existence amongst the youth and, of course, among the larger society. But this does not seem to have come out very clearly to all Ghanaians that this is a very important aspect of our developmental process that has to be considered both by Government and by the chiefs and elders.
The Ministry of Manpower, Youth and Employment would continue to support such activities and encourage the youth to organize such programmes to ensure that the elders and the chiefs, and all the opinion leaders, who seem
to be controversial in many cases, would consider their viewpoints and agree to bring peace to their respective communities. In this instance, I think it is a case in which parents can learn from their wards and I commend the hon. Member and the youth of Ghana for being involved in such activities.
Thank you very much, Mr. Speaker.
Mr. Francis Aggrey Agbotse (NDC - Ho West) 10:35 a.m.
Mr. Speaker, I rise to support the Statement being discussed. I have been at several meetings of the Volta Regional Security Committee where these issues were discussed. It is not only an Nkonya/Alavanyo problem; there is also the problem of Peki/Tsito which is similar. They are all based on land, and where land is concerned, there are vested interests who would not want to see peace because they benefit from the use of such lands. I am hoping that this Statement would ginger the people of Peki and Tsito to come together to also resolve the issue that creates conflict between them.
I am glad that the Member of Parliament for the area states that there is no peace as such, yet we are hoping that what is happening would bring everlasting peace to the area. Eighty years is too long a time to kill one another and to destroy property senselessly. So I am glad my hon. Colleague Member of Parliament for Ho East has brought this up to Parliament and for all of Ghana to hear about what is happening in that area and then call upon all other areas which have conflict to do likewise. It has begun with the youth of Alavanyo/Nkonya; I hope the youth of Peki/Tsito would also take it up to see everlasting peace.
Mr. S. K. B. Manu (NPP - Ahafo- Ano South) 10:35 a.m.
Mr. Speaker, I also rise
to contribute to the Statement made by the hon. Member. Mr. Speaker, land and chieftaincy have been the main sources of conflict all over the world, particularly in our part of the world.
Mr. Speaker, I would want to thank the Regional Coordinating Council, which according to the Member of Parliament of the area, initiated the peace talks, and also congratulate the youth who have supported the leadership of the Coordinating Council. I am congratulating the leadership because leadership they say is cause and all others is effect. If leadership does not show vision and direction, the followers get lost along the way. But if leadership also begins something and the youth do not support them, they do not get anywhere with their initiative. It is for this reason that I thank the leadership and also the youth for supporting this peace programme that has been initiated and is on-going.
Mr. Speaker, I would like to use this occasion to appeal to chiefs that chieftaincy is a means for them to rule over a people. And if their ascending the throne or seeking to ascend the throne would lead to the killing of the people they are coming to rule, then their chieftaincy or their rule will only be like the great statue of Oxymandias the King that stands in the desert without a following. Therefore, they should learn to know that it is the people that they come to rule over, and it is the welfare of those people that they should seek rather than their personal interest that may even lead to the sacrifice of the lives of their subjects.
Mr. Speaker, I would also like to appeal to other areas in this country where there are such uneasy situations, where there are conflicts, be it over land or over chieftaincy, that they should emulate the shining example of the people of Alavanyo and Nkonya and also initiate such peace talks. Because, as has been canvassed

earlier, without peace no development can ever take place and if we are people who want to make progress, then the first thing we should look for in our lives is peace. And I would like to call on all in this country - pockets of uneasiness that are existing in all parts of this country -- to think like the people of Alavanyo and Nkonya are doing.

Particularly to the youth, sometimes, if the elderly have spent their lives and are not seeing the need for development, the youth should take up the challenge and challenge the old, because all things being equal, it is the youth who are going to live longer and enjoy either the benefits of the war or suffer the atrocities of the war. And if there is progress they stand to gain better than the old who may have spent their lives and are now preparing to go to their graves.

Therefore the youth of this country must take peace as their prime objective and search for it day and night because it is when they find peace that they can also see progress in their lives.

I thank you, Mr. Speaker, for the opportunity.
Mr. I. K. Asiamah (NPP 10:45 a.m.
None

Mponua): Mr. Speaker, I rise to associate myself with the Statement on the floor. Mr. Speaker, I am happy with the role played by the youths of Alavanyo and Nkonya in bringing about this wonderful peace. Mr. Speaker, most often the youths of this country have been used as instruments of violence and that is very unfortunate. I believe that with this wonderful effort on the part of the people of Alavanyo and Nkonya, that is the youth I am talking about, the youths of other areas would

MR. AGBOTSE] emulate this shining example. Most of the conflicts we have experienced in other parts of Ghana are promoted by the youths of this country because we have the physical strength to cause mayhem and violence and so I believe with this lesson other areas where we have similar conflicts would learn from this.

Mr. Speaker, it is unfortunate that most of these conflicts are promoted by our elderly intellectuals who normally sit in the cities, enjoy with their families and fan chieftaincy and ethnic conflicts in their traditional areas; that is very, very unfortunate. For all you know, this conflict is being promoted by the elderly, well educated people, well endowed people in our cities and that is something we must check.

Politicians are worse offenders of this; we sit in our capital cities, enjoy the goodies and fan ethnic conflicts, political conflicts in remote areas. I think this is something that as leaders of this country we must take note of; whether we are chiefs, whether educated, whether we are politicians we should ensure the welfare of the youth of this country. We must not continue to perpetrate poverty in this country because by so doing we end up promoting poverty rather than development.

So it is high time that as Ghanaians and, of course, as citizens of this country, political leaders, traditional leaders, we ensured the welfare of our youth. This is because when we talk of Ghana it is about the youth of this country and that is why as a young Member of Parliament I am very much concerned about how we use the youths to achieve our parochial interest. It is very unfortunate. And as we begin to talk about the role of the youths of Alavanyo and Nkonya in promoting this peace, we must also send the signal clear to all and sundry that we the youths

of this country are tired of being used as instruments of violence. We are very tired and this signal should be sent clearly to our leaders here, our traditional leaders that whatever we do today we will reap in the future.

If we want mother Ghana to prosper tomorrow it is about what we inculcate in the youths of this country today. If we want Ghana to be like the Malaysia we are talking about then we should make sure that we sow the seeds that will get us to where Malaysia is today. So please, Mr. Speaker, if we are talking about violence and development it is high time we as legislators -- We should not only seek our welfare and the welfare of our political parties - [Hear! Hear!] -- but make sure that Ghana stands to benefit tomorrow. And if Ghana will benefit tomorrow it is how we groom the youths of this country today so that in our absence they can effectively and efficiently take over as leaders of this country.

Mr. Speaker, with these few words I thank you very much.
PAPERS 10:45 a.m.
Mr. Owusu-Adjapong 10:45 a.m.
Mr. Speaker, I thought having laid the Papers we could take the motions. And Mr. Speaker,
I want to crave your indulgence to allow the Deputy Minister for Finance and Economic Planning Mr. Kwaku Agyemang-Manu to move the motion on behalf of the Minister.
Mr. Speaker 10:45 a.m.
Let him proceed.
MOTIONS 10:45 a.m.
Mrs. Grace Coleman 10:45 a.m.
Mr. Speaker, I beg to second the motion
Question put and motion agreed to.
Resolved accordingly.
BILLS - SECOND READING 10:45 a.m.
Mr. Agyemang-Manu 10:45 a.m.
Mr. Speaker,
I beg to move, that Value Added Tax (Amendment) Bill, 2006 be now read a Second time.
rose
Mr. Speaker 10:45 a.m.
Hon. Minority Leader?
Mr. Bagbin 10:45 a.m.
Mr. Speaker, I have been
up on my feet for some time, because even though we took the decision to allow the motion to be moved, it is important that in

always asking for leave we are told why we should set aside the Standing Order and let things move as we are praying. But to just move and assume that people know why it should be done today and not to wait for the 48 hours is incorrect. So next time I think that they should state why the urgency, why the need for us to set aside the Standing Order. It is important to get that for our records.
Mr. Speaker 10:45 a.m.
Yes, you have made your point.
Question proposed.
Chairman of the Committee (Mrs. Grace Coleman) 10:55 a.m.
Mr. Speaker, I beg to present the report of the Finance Committee on the Value Added Tax (Amendment) Bill, 2006.
1.0 Introduction
The Value Added Tax (Amendment) Bill, 2006 was laid in the House on Tuesday, 24th January 2006 and referred to the Finance Committee for consideration and report in accordance with the 1992 Constitution and the Standing Orders of the House.
To consider the Bill, the Committee met with the Deputy Minister for Finance and Economic Planning, hon. Kwaku Agyeman Manu and officials from VAT Service and reports as follows:
2.0 References
The Committee referred to the following documents:
1. The 1992 Constitution of Ghana

MR. AGBOTSE] 2. Value Added Tax Act 1998 (Act 546)

3.0 Purpose of the Bill

This Bill is to amend the Value Added Tax Act, 1998 (Act 546) to zero-rate locally produced textbooks, exercise books, locally manufactured agricultural machinery, cutlasses and for related matters.

4.0 Observations

1. The Committee observed that the Bill is to bring out pricing d i s p a r i t y between imported agricultural machinery, cutlasses, textbooks and exercise books and locally produced items due to unequal tax management. It is therefore required to review the VAT system to make these locally produced i tems more compe-titive. This, in the opinion of the Committee will reduce the tax burden on the selected items through zero-rating.

2. The Committee again observed that when the items are imported into the country, VAT is not charged on them at the port of entry on account of their “exempt” status. In order words, if the items are taxable in their country of origin, they are brought onto the Ghanaian market completely free of VAT because they have been zero-rated in the country of origin. Members were informed by the officials that the result is that imported goods enjoy a pricing advantage over locally produced goods on account of lower tax built-up.

3. The Committee further observed that the tax paid on the finished products will be zero and will not be charged. In addition, the taxes paid on input raw materials are recoverable. By implication, the cost of locally produced goods will be completely devoid of VAT when they enter the domestic consumer market.

4. The Committee agrees with the Minister of Finance and E c o n o m i c Planning that this will position them to compete f a v o u r a b l y w i t h imported items which will address the concerns of stakeholders in the industry. Lower prices will also have a positive impact on the relevant sectors and enhance the activity of business.

5. The officials from VAT and IRS informed the Committee that the proposed amendment will remove the items from the exempt Schedule (Schedule 1) and place them on the zero- rated Schedule (Schedule 2).

6. The Committee noted that the present state of the Law is that agricultural machinery, exercise books and textbooks are exempt goods and therefore not subject to tax, hence taxes paid on inputs used in their production are incorporated into the final product price.

7. The Committee again observed that for the purpose of easing the cash flow problems suffered by businesses that export less than 70% of their input, the Bill seeks to lower the qualifying threshold for refund to export of 25% of output in the relevant tax period.

8. The Committee finally noted that this amendment will ensure that VAT registered businesses are able to take full advantage of input tax credit accruing to them through the zero-rating of exports, thus relieving them of cash flow problems and thereby boosting the national export drive.

5.0 Conclusion

The Committee after carefully examining the Bill, and believes i t to be in a right direction, respectfully

recommends to the House to adopt and approve the Value Added Tax (Amendment) Bill 2006 without any amendments.

Respectfully submitted.
Mr. E. K. Salia (NDC -- Jirapa) 10:55 a.m.
Mr. Speaker, I rise to support the Bill and in doing so, I agree that the benefits to be derived from the Amendment would be inuring to the economy. I therefore support it.
Mr. P. C. Appiah-Ofori (NPP -- Asikuma/Odoben/Brakwa) 10:55 a.m.
Mr. Speaker, I have two observations to make. I feel that it is necessary for me to draw the attention of the House to them, other than that we are going to pass a law which would not help the country absolutely.
Mr. Speaker, if you read clause 1(4), it refers to locally manufactured agricultural machinery and cutlasses. Mr. Speaker, if you go to the North, a major agricultural implement for the production of food is the hoe. If you come down south here, when we are producing or cultivating yams, we use the hoe. Mr. Speaker, if we are cultivating even plantain and you are planting the suckers, we should use a special axe to dig and plant the plantain suckers. All these are locally manufactured agricultural implements.
So if we confine it to cutlasses and leave out hoes which are manufactured locally, then we are saying that hoes should attract VAT. I have worked in a factions that produces these items, and I know as a fact that they contribute a lot to the production of food in the country. So if we leave it out then we are being discriminatory, or we are trying to discriminate.
What I am saying is that I have prepared an amendment. Unfortunately, it has not been advertised and I am proposing

the amendment that hoes and all other agricultural implements manufactured locally should be accommodated in this so that they would also be exempted from VAT. Specifically, Mr. Speaker, if you look at (4) -- “Locally manufactured agricultural machinery and cutlasses”, all that I am saying is that we should remove “and” and after “cutlasses,” we should add “ and other agricultural implements” so that -- [Interruptions.] Yes, locally manu-factured.
Mr. Speaker 10:55 a.m.
Hon. Member for Asikuma/Odoben/Brakwa, I think you may have to wait until we get to the Consideration Stage.
Mr. Appiah-Ofori 10:55 a.m.
Yes, Mr. Speaker. The second issue I want to raise is on clause 2 (1) (a). Mr. Speaker, if we allow this to -- [Interruption.]
Mrs. Grace Coleman 10:55 a.m.
Mr. Speaker, on a point of order. Mr. Speaker, all these things are being noted and they will be taken at the Consideration Stage. I think it is a little premature at this stage to be discussing them.
Mr. Appiah-Ofori 10:55 a.m.
Mr. Speaker, with regard to the Consideration Stage My proposed amendment is not on the Order Paper. If they were, I would not have talked now. So it is necessary for me to raise these issues now and then when we get to the Consideration Stage I would be allowed to argue.
Mr. Owusu-Adjapong 10:55 a.m.
Mr. Speaker,
inadvertently the amendment proposed by even the Committee itself have not been tabulated. The Clerk just saw me and he has written an addendum for the amendments, and I would want to assure him that that together with the Committee's the amendments would be available.
Mr. Appiah-Ofori 10:55 a.m.
Mr. Speaker, I would leave them provided I would be allowed to more the two amendments.
Mr. Speaker 10:55 a.m.
Hon. Majority Leader, so are you saying we should defer this matter or stand it down?
Mr. Owusu-Adjapong 10:55 a.m.
Mr. Speaker, it would be needed at the Consideration Stage; we have not reached the Consideration Stage, we are now at the Second Reading, the principles. But I wanted to assure him that nobody will stand on this amendment and that he would need to convince the rest of the hon. Members. So he should continue with the principles he is trying to bring out and at the appropriate time we will get the details for the Consideration Stage.
Mr. Edward Salia 10:55 a.m.
Mr. Speaker, if it is permissible, I think I will support him on the principle that he has outlined. It is reasonable to move that amendment because we know other manufacturers of agricultural implements other than cutlasses. Consequently, I would rather think that one should not list the type of agricultural implements but generally state agricultural implements and agricultural tools, without mentioning cutlasses and hoes because there are others, sickles and various other things which if we were itemize to will be a very long list. So in principle I agree that the amendment should be moved in that respect.
Mr. A. O. Aidooh 10:55 a.m.
Mr. Speaker, I just wanted to say that our hon. Colleague has spoken and so all that he said is up to the other hon. Member's point.
Mr. Salia 11:05 a.m.
Mr. Speaker, it is a point of clarification I wanted to make. Agricultural tools and implements are not just cutlasses, but there are hoes, sickles and other things that are normally used - axes, ploughs, catapults, arrows and so on.

Dr. Benjamin Kunbuor (NDC --

Lawra/Nandom): Mr. Speaker, I want to make two short observations on the Committee's Report; and I am not quite clear in my mind the particular policy objective that the proposed amendment is seeking to achieve.

One has seen over the years the decline of Value Added Tax (VAT) as a revenue base in this country, and one was expecting that the policy thrust would be a situation in which you would increase the Value Added Tax in terms of its contribution to national revenue. But when you look at the policy consideration for this amendment, in paragraph (1), it is basically supposed to address issues of making some category of items competitive in relation to foreign imports.

Then you come to paragraph (5) and it says that the VAT and Internal Revenue Service (IRS) informed the Committee that the proposed amendment would remove the items from the Exempt Schedule, that is, Schedule 1 and replace them with zero- rated schedule. Mr. Speaker, this is where I have the difficulty. When you make a particular item exempt, it certainly means it is not taxed and no other consequences are triggered. When you make it zero- rated, it certainly means you are taxing

MR. APPIAH-OFORI] it but at a zero rate; but there are some consequences and the consequences are the input credit system. We have time and again in this House indicated that our risk analysis for VAT Service and the rate of fraud is still relatively high and eroding the revenue base.

So the policy consideration for lifting these items from exempt to zero-rated should not be one of business competition as with imports. But it seems you want to put more money back into the hangs of the producers of these items through the input tax credit system; and that why I want to be very clear in my mind what exactly the proposed amendment seeks to achieve. Is it that you want to cede your revenue, but at the same time put money in some particular business category? I think we need to marry these two policies and be very clear in our minds, otherwise we are going to have a difficulty with what we have seen in paragraph (7) of the 70 per cent of the input and the 25 per cent of the output in this particular situation.
Mr. K. Agyemang Manu 11:05 a.m.
Mr. Speaker, I think the policy thrust is quite simple. We are treating imports of these particular items that we have mentioned under the zero-rated regime, and we thought that to make it competitive, we have to treat the locally produced or manufactured ones within the same regime, so that whatever benefits that accrue to those who import them would also accrue to those who produce them locally; and we
believe that this fair and would make their pricing and whatever benefits each of these two categories have, very competitive.
Question put and motion agreed to.
The Value Added Tax (Amendment) Bill was accordingly read a Second time.
Mr. Speaker 11:05 a.m.
Majority Leader?
met with the Deputy Minister for Finance and Economic Planning, hon. Kwaku Agyemang Manu and officials from CEPS and reports as follows:
2.0 References
The Committee referred to the following documents:
1. The 1992 Constitution of the Republic of Ghana
2. Customs and Excise (Duties and Other Taxes) Act, 1996 (Act 512)
3. 2006 Budget Statement
3.0 Objective of the Bill
The object of the Bill is to amend the Customs and Excise (Duties and Other Taxes) (Amendment) Act 1996 (Act 512) in accordance with the 2006 Budget Statement which was presented to the House in November 2005. 4.0 Observations
1. The Committee observed that this amendment will provide for the zero rating of imported dumpers and the tariff on the importation of parts, components and accessories to assemble light aircraft.
2. Members expressed so much concern
about what constitutes a light aircraft. Some were of the opinion that all types of aircraft could be imported under the term light aircraft as stated in the Act without paying any duty on it.
For the avoidance of doubt, the technical team from Customs, Excise and Preventive Service (CEPS) informed the Committee that chapter 88 of the H.S. Code defines light aircraft as “empty and unleaden weight of 2 tons or less with a maximum take off weight of 500 kg.”
3. The Committee was informed that
Majority Leader (Mr. Owusu- Adjapong) 11:05 a.m.
Mr. Speaker, I was wondering if we could shift and take the next one whilst we wait for the Clerk to let us have the addendum. So if we can take item 12.
Suspension of Standing Order 128 (1)
Mr. Agyemang Manu (on behalf)of the Minister for Finance and Economic Planning) 11:05 a.m.
Mr. Speaker, I beg to move, that notwithstanding the provisions of Standing Order 128(1) which require that when a Bill has been read a Second time it shall pass through a Consideration Stage which shall not be taken until at least forty- eight hours have elapsed, he Consideration Stage of the Customs and Excise (Duties and Other Taxes) (Amendment) Bill may be taken today.
Mrs. Coleman 11:05 a.m.
Mr. Speaker, I beg to second the motion.
Question put and motion agreed to.
Mr. Agyemang Manu 11:05 a.m.
Mr. Speaker, I beg to move that the Customs and Excise (Duties and Other Taxes) (Amendment) Bill be now read a Second time.
Chairperson of the Committee (Mrs. Grace Coleman) 11:05 a.m.
Mr. Speaker, I beg to read the Report of the Finance Committee on the Customs and Excise (Duties and Other Taxes) (Amendment) Bill.
1.0 Introduction
The Customs and Excise (Duties and Other Taxes) Bill was laid in the House on Tuesday, 24th January 2006 and referred to the Finance Committee for consideration and report in accordance with the 1992 Constitution and the Standing Orders of the House.
To consider the Bill, the Committee
dumpers are heavy duty trucks used for carrying mineral ore in the mining areas.
The Deputy Minister for Finance and Economic Planning informed Members that the exemption of dumpers from the payment of taxes was inadvertently left out in the H.S. Code and that the Ministry of Finance and Economic Planning is often called upon to grant exemption for its clearance.
4. The Committee is of the opinion that it is therefore proper to grant tax exemption or waiver for the clearance of dumpers into the country.
5. The Committee noted that clause 1 of the Bill reduces the rate o n dumpers from five per cent (5%) to zero.
6. The Committee further noted that clause 2 inserts a new sub-section with respect to the tariff on completed and semi-knocked down aircraft parts, components and accessories.
5.0 Conclusion
The Committee carefully examined the Bill and found it to be beneficial and respectfully recommends to the House to adopt its report and approve the Customs and Excise (Duties and Other Taxes) Amendment Bill without any amend- ments.
Respectfully submitted.
Mr. Abuga Pele 11:05 a.m.
Mr. Speaker, I am not
about to see anything, particularly relating to what the Motion, but Mr. Speaker, I am beginning to get a bit worried about something. Anytime there is a report, even if it is one page often you would find that the Chairperson or Chairman would go ahead and read only the conclusion. Mr. Speaker, that is depriving many Members
Mr. Speaker 11:05 a.m.
Chairperson, are you
winding up?
Mrs. Coleman 11:05 a.m.
I wanted to just
comment on what my colleague just said. [interruptions] Okay.
Mr. Osei Kyei-Mensah-Bonsu 11:05 a.m.
Mr.
Speaker, I think that it lies within my competence to react to what my colleague just said. Normally, if you have reports which are presented to Members way back before they are debated here then normally person presenting it would read the entire thing. But because this a report that was recently presented to us it is assumed that all Members have copies of it and particularly as he himself has said, it is a very short one which is why is fast that the salient points are captured and the Hansard Department really capture the entity of the report just to save time. But if indeed a new rule is coming; we have been doing this since time immemorial. If now he is saying that no, we should to the rules and then begin to read everything, so be it. But I thought that that is the convention, that is the practice and particularly considering the fact that it was most recently laid and distributed we do not need to go through the entire process to save precious time of this House.
Mr. Speaker 11:05 a.m.
Is anybody winding up?
Ms. Dansua 11:15 a.m.
Mr. Speaker, I am rising on point of order. He has just made an elaborate explanation of why
Mr. Speaker 11:15 a.m.
Item 14, Hon. Minister for Finance and Economic Planning?
Suspension of Standing Order 128 (1)
Mr. Kweku Agyemang-Manu 11:15 a.m.
Mr. Speaker, I beg to move, that notwithstanding the provisions of Standing Order 128(1) which require that when a Bill has been read a Second time it shall pass through a Consideration State which shall not be taken until at least forty-eight hours have elapsed, the Consideration Stage of the Customs and Excise (Duties and Other Taxes) Amendment) Bill may be taken today.
Mrs. Grace Coleman 11:15 a.m.
Mr. Speaker, I beg to second the motion.
Question put and motion agreed to.
Resolved accordingly.
Mr. Speaker 11:15 a.m.
Hon. Members, we now move to item 15 -- Customs and Excise (Duties and Other Taxes) (Amendment) Bill at the Consideration Stage.
rose
Mr. Speaker 11:15 a.m.
Hon. Member for Jomoro, do you have point of order?
Mr. Speaker 11:15 a.m.
Hon. Member, we are now at the Consideration Stage.
BILLS - CONSIDERATION STAGE 11:15 a.m.
rose
Mr. Speaker 11:15 a.m.
Hon. Minority Leader?
Mr. Bagbin 11:15 a.m.
Yes, Mr. Speaker, I do not know whether it is part of the Long Title, but recently I have been seeing this statement, “Enactment by the President and Parliament” which is usually after the Long Title. Mr. Speaker, I object strongly to the insertion of that phrase: “Enactment by the President and Parliament.” Mr. Speaker, there is a creeping intrusion into the power of Parliament to legislate, by the Executive. I think that laws in this country are enacted by Parliament; they are not enacted by the President and Parliament. The President assents to a Bill passed by Parliament. Assenting to a Bill is not part of enacting a Bill. Mr. Speaker, if you go through the Constitution, starting from article 93, the power is clear there. Even though it says, “subject to the provisions of this Constitution”, it states that the legislative power of Ghana shall be vested in Parliament and shall be exercised in accordance with the Constitution. It is very clear in article 93.
Mr. Speaker, if you go to article 106, yes it says that Bills are passed by Parliament and assented to by the President. And in explaining, if the President, for example, refuses to assent to a Bill and sends it back to us, and we disagree with him, the President has no option than to assent to the Bill. Mr. Speaker, the word “Enactment” is also defined in the Constitution at article 295 of the Constitution; and it says “enactment means an Act of Parliament, a Decree, a Law or a constitutional instrument or a statutory instrument or any provision of an Act of Parliament, a Decree, a Law or of a constitutional or of a statutory instrument.” Mr. Speaker, this phraseology of “Enactment by the President and Parliament,” in my view, is an error. It is incorrect, and we should amend it. As I said, it is a recent development in the Fourth Republic; and nobody has convinced us especially me that, that is the right way of now using phraseology in our Bills.
Mr. Speaker, immediately we observed this, we made sure that a question was filed on this - Urgent Question - for whoever is the draftsperson or the hon. Minister for Justice and Attorney-General to come to, at least, draw the attention of the House to why this phraseology should be used. That has not been done and I have a difficulty in accepting it. In fact, some legal experts recently drew my attention to it and said that no, in enacting laws, it is the duty and function of Parliament and not “Parliament and the President”.
So Mr. Speaker, I would proceed to move that that phrase be amended in the Bill.
Mr. A. O. Aidooh 11:25 a.m.
Mr. Speaker, I see the worry of my hon. Colleague but I am not able to support him; I disagree with him.
Mr. Speaker, “enactment” is defined by the Constitution at page 182, that an “enactment” means an Act of Parliament, a Decree…” Mr. Speaker, this is enactment as a noun. Mr. Speaker, the “Enacted by” in the Bill is a verb, that is the first difference. Mr. Speaker, further to that, article 106 reads as follows:
“The power of Parliament to make laws shall be exercised by bills passed by Parliament and assented to by the President”.
Mr. Speaker, when we pass bills here, they have not been enacted. Mr. Speaker, documents, that is bills that pass through Parliament do not go out as enactments. We have not enacted them as laws until they have the President's assent. Mr. Speaker, you would notice that on page 182, the examples given of enactments are documents assented to by the President. A Decree is a piece law signed by the Head of State. An Act of Parliament is a Bill passed by Parliament and assented to by the President.

Mr. Speaker, my argument is that a Bill that passes through Parliament does not become an enactment, or it is not enacted because it has come to Parliament. Not until it has got the assent of the President, it is not an enactment; it is not an Act.

Mr. Speaker, I therefore submit that my hon. Colleague's concerns are misplaced and therefore insofar as the words ‘enacted by Parliament and assented to by the President' are concerned, my view is that they can be retained. Mr. Speaker, that is never an intrusion by the Executive into our domain because article 106 in fact, creates that avenue that laws are enacted by Parliament and assented to by the President. Mr. Speaker, it is at that stage that it becomes enacted.

Therefore, I seriously disagree with my hon. Colleague.
Mr. Speaker 11:25 a.m.
Hon. Members, I suggest that this is a matter we should leave to the draftsmen. Let us leave this matter to the draftsmen because I do not think we are going to resolve it here. Let us leave it to them.
Mr. Bagbin 11:25 a.m.
Mr. Speaker, i t is important that we leave it to the draftsperson but we are just drawing attention to it. But I quoted from page 182 the definition of ‘enactment' so that my hon. Colleague would see that it mentions constitutional instrument, it mentions statutory instruments which are not assented to by the President but are enacted that is why I quoted it. Decrees are not passed by Parliament but they are called enactments so I know it is a noun and they are using the verb enacted. So it is not all the things that we pass here that become law that are assented to by the President before they become Acts or are enacted by Parliament. So it is important that the draftspersons reconsider this matter.
Mr. Speaker 11:25 a.m.
Hon. Minority Leader and other hon. Members, you may have to save your breath for the time being. Let us continue. I am putting my Question again, that the Long Title stand part of the Bill.
Question put and motion agreed to.
The Long Title Ordered to stand part of the Bill.
Mr. Speaker 11:25 a.m.
Hon. Members, we have come to the end of the Consideration Stage of the Customs and Excise (Duties and Other Taxes) (Amendment) Bill.
Mr. Agyemang-Manu 11:25 a.m.
Mr. Speaker, I beg to move, that notwithstanding the provisions of Standing Order 131(1) which require that when a Bill has passed through the Consideration State, the Third Reading thereof shall not be taken until at least twenty-four hours have elapsed, the motion for the Third Reading of the Customs and Excise (Duties and Other Taxes) (Amendment) Bill may be moved today.
Mrs. Coleman 11:25 a.m.
Mr. Speaker, I beg to second the motion.
Question put and motion agreed to.
Resolved accordingly.
BILLS - THIRD READING 11:25 a.m.
Mr. Agyemang-Manu 11:25 a.m.
Mr. Speaker, I beg to move, That notwithstanding the provisions of Standing Order 80(1) which require that no motion shall be debated until at least forty-eight hours have elapsed between the date on which notice of the motion is given and the date on which the motion is moved, the motion for the Second Reading of the Internal Revenue (Amendment) Bill may be moved today.
Mrs. Coleman 11:25 a.m.
Mr. Speaker, I beg to second the motion
Question put and motion agreed to.
Resolved accordingly
BILLS - SECOND READING 11:25 a.m.
Mr. Agyemang-Manu 11:25 a.m.
Mr. Speaker, I beg to move, that the Internal Revenue (Amendment) Bill be now read a Second time.
Question proposed.
Mrs. Coleman 11:25 a.m.
Mr. Speaker, I beg to present the Report of the Finance Committee on the Internal Revenue (Amendment) Bill.
2.0 Reference
The Committee referred to the following documents:
1. The 1992 Constitution of the Republic of Ghana
2. Internal Revenue Act, 2001 (Act
592)
3. 2006 Budget Statement
3.0 Object of the Bill
The object of the Bill is to amend the Internal Revenue Act, 2001 (Act 592) to reflect tax concessions, incentives and tax relieves provided in the 2006 Budget Statement.
4.0 Observations
4.1 The Committee observed that Clause 1 is to amend section 10 of the Act to provide a tax exemption on the dividends of capital venture finance companies established in a cco rdance with the Venture Capital Fund Act, 2004 (Act 680) for the period of five (5) years from the commencement of their opera-
tions.
4.2 The Committee noted that Clause 2 is to amend section 11 of the Act by granting a (5) five-year tax holiday to venture capital finance companies that meet the eligibility requirements under the Venture Capital Fund Act, 2004 (Act
680).
It was further noted that the amendment is to extend the capital gains tax relief period granted to companies listed in the Ghana Stock Exchange from fifteen (15) to twenty (20) years.
4.3 That clause 3 is to amend the Act through the insertion of a new clause 19A which allows the deduction of the investment made by a financial institution in a venture capital finance company to the extent of an amount equal to the full amount invested in a year of assessment.
4.4 Members noted that Clause 4 is to amend the Act by allowing a deduction of mortgage interest by home owners in respect of loans used in acquiring o r constructing residential premises.
4.5 The Committee observed that Clause 6 amends section 38 by replacing “chargeable income” with “assessable income” to ensure consistency in t h e use of concepts with other parts of t h e Act for example Sections 61,57 and 60.
4.6 That clause 7 amends the Act by extending the exemption on capital gains to venture capital finance companies during the first five (5) years of assessment.
4.7 The Committee observed further that the Act if amended will remove the difficulties inherent in section 131(1) of the Act as it limits application to only
Mr. Abuga Pele 11:25 a.m.
Mr. Speaker, there have been instances where Reports were distributed while hon. Members were sitting -- the Reports are distributed right here and they are read by the Chairmen of the Committees. So for the hon. Member to say that it is on all occasions that Reports are sent in advance to hon. Members to study before they are read in Parliament is not very true. Even on those occasions when they are distributed right here, within Parliament, the Report normally is read as if we have had them in advance.
So Mr. Speaker, on such occasions, we should not just read the conclusions because if you read the conclusion alone then you deprive hon. Members of what took place. To just say, “We
met the Deputy Minister for Finance and other members from the Ministry and the conclusion is that the Report be approved,” looks very vague to me.
Mr. Speaker 11:35 a.m.
Let her go on.
Mrs. Coleman 11:35 a.m.
Mr. Speaker, at the mention of my hon. Colleague, I would be happy to read everything, if that is what he wants. But before I go on, I will still say that when Reports are distributed on the floor of the House - [Interruption.]
Mr. Speaker 11:35 a.m.
Hon. Member, please proceed.
Mrs. Coleman 11:35 a.m.
Mr. Speaker, right in the Report, we have made references to all the documents that we consulted. The object of the Bill is to amend the Internal Revenue Act, 2001, Act 592, to reflect tax concessions, incentives and tax reliefs provided in the 2006 Budget Statement.
Mr. Speaker, my hon. Colleagues are aware that in the 2006 Budget Statement, there were portions where we need the necessary tax amendments to back the issues and the Bills that would come forward. That is why we are doing this.
The officials of the Internal Revenue Service (IRS) explained to the Committee that the clause introduces a new definition section which makes it clear that in the health business, those who have registered with the Ghana Tourist Board will benefit from the concession in the Bill.
Mr. Speaker, the Committee after carefully examining the Bill respectfully recommends to the House to adopt its Report and approve the Internal Revenue (Amendment) Bill, subject to the
Mr. Sallas-Mensah (NDC - Upper West Akim) 11:35 a.m.
Mr. Speaker, I want to contribute to the motion on the floor. Clause 10 of the (Amendment) Bill is seeking to raise the provisional assessment of taxes from 25 per cent to 50 per cent; 10(2) is also introducing a new clause, that anybody who objects to those provisional assessments, no court in this country should entertain that objection.
Mr. Speaker, if the law is passed as it is, all of us in this room are in serious trouble. We may end up going to jail one by one, unless you are not doing business in this country.
Mr. Speaker, right now, the position is that when a provisional assessment is raised by the Internal Revenue Service, if you feel that the assessment is unreasonable you object to it and you are asked to pay 25 per cent of the assessment rate. Now they are raising that assessment to 50 per cent and you do not even have the nerve to go to court to appeal against that assessment. That is what the Ministry has brought to Parliament for us to pass.
Mr. Kwaku Agyemang-Manu 11:35 a.m.
On a point of order. Mr. Speaker, I just want to correct an impression the hon. Member is trying to create before the House.
Mr. Speaker, I never said at the committee level that because we are reducing corporate taxes, we want to find another way to come back and raise the same revenues.
Mr. Sallas-Mensah 11:35 a.m.
Mr. Speaker, I was not the only person at the Committee. That was one of the reasons he was trying to use to justify the imposition of these taxes.
Mr. Speaker, I strongly feel that this is a lazy man's way of collecting taxes in this country. They just want to sit in the office, slap unreasonable provisional assessments on taxpayers and ask them to pay 50 per cent upfront.
Taxes are to be paid on profit. If you do not make profit you do not pay taxes. So why would you ask me to pay tax upfront when the business has not even started? This is an issue I want to bring to the floor of this House to be debated, otherwise, all of us in this House will one day go to prison, because you do not even have the right to appeal or to object.
Mr. Speaker, I will quote the clause involved.
“An application, action or appeal shall not be entertained by a court in respect of objection under section 128 unless the person to whom the decision relates has paid the amount specified under subsection (1) of this section.”
You must pay the 50 per cent before even a court can entertain your case. That is not the issue right now. So I urge this House to look at this amendment seriously and reject it.
Mr. Speaker 11:35 a.m.
May I ask a question, hon. Member for Upper West Akim? Do you propose to file an amendment at the Consideration Stage?
Mr. Sallas-Mensah 11:35 a.m.
Mr. Speaker, yes, at the appropriate time, I would file an
amendment.
Mr. Kyei-Mensah-Bonsu 11:35 a.m.
On a point of order. Mr. Speaker, I think the issue raised by my Colleague, hon. Sallas- Mensah, is quite germane. We may have to look at it again. But I thought that his own submission was rather apocalyptic because he said that if we are not careful, all of us here will go to jail one by one “will go to jail one by one.” Mr. Speaker, I thought that the operative word, “will,” - “will go to jail” - is rather too strong. If he is saying that there is a possibility that some may go to jail, then, perhaps, that may be acceptable. But it is too cataclysmic for him to make such a doomsday pronouncement in this House. But notwithstanding, Mr. Speaker, I believe that it is a point worth considering, and when we come to the Consideration Stage, we shall have to look at it again.
Mrs. Coleman 11:35 a.m.
Mr. Speaker, I think the hon. Member on the other side has left something very important out. If you look at the Report, we said that the Committee proposes an amendment to the clause and that we are asking for an assessment. It is the assessment. You can object to the assessment. What is wrong with it? So far as I am
concerned, the hon. Member is not right. He should not bring this in at all. He should wait until the Consideration Stage and bring it and then we would see whether it makes any sense at all.
Mr. P. C. Appiah-Ofori 11:45 a.m.
Mr. Speaker, the provisions in the Bill have a purpose. More often than not, companies manipulate their taxes and succeed in defrauding the state. I have had the opportunity to look into the accounts of some companies for the Revenue Agencies Governing Board (RAGB) and my finding has been that some of the companies sell goods and they do not treat them as sales.

So when they come with corporate tax they pay virtually nothing to the State. Some of them manage the total cost, increase the cost of production and declare little profit or pay nothing. The country cannot continue like this. So if the Government or if the Internal Revenue Service comes out with this assessment, the onus of proof that this is in excess lies with whoever prepares the accounts, so that these flaws are addressed; so that these fraudulent practices would be minimized; so that the Government would be able to generate a lot of revenue to prosecute programmes so bring relief to this co9untry. So let us leave it like that and whoever thinks he has the power, let him come and challenge the Internal Revenue Service.
Mr. Haruna Iddrisu (NDC - Tamale South) 11:45 a.m.
Mr. Speaker, I just want to make a slight comment on the principles espoused by hon. Sallas-Mensah. Mr. Speaker, my view is that we should be cautious because we cannot use legislation to cure a defect of tax avoidance. My view is that what he has raised is germane; when we come to the Consideration Stage, we should look at it. Some of it has to do with strengthening the administrative efficiencies of the tax- collecting agencies. One does not come to Parliament to use legislation to deal with the person avoiding tax. I think that when we get to the Consideration Stage, once we have suspended the Standing Orders, we would be allowed to move amendments related to it, and move on.
Mr. Edward Salia 11:45 a.m.
Mr. Speaker, I just want to reiterate that at the committee level there was a lot of division initially on this particular matter. And I think that it will serve this House better if the hon. Deputy Minister for Finance and
Mr. Speaker 11:45 a.m.
Hon. Member for Jirapa, the hon. Member for Upper West Akim proposes to file an amendment at the appropriate time. That is the point he made.
Majority Leader/Minister for Parliamentary Affairs (Mr. Owusu- Adjapong) 11:45 a.m.
Mr. Speaker, generally the Bill has a number of useful intentions and will definitely help the development of this country. But looking at this proposal, clause 10, there are two issues and I would want us to address them separately. The first is 10(1) which tries to have 50 per cent mandatory payment. The information that was being given by hon. Sallas-Mensah seems to be different from what I am getting also from the Deputy Minister, that is, that there has been no such 25 per cent; that is the position that the hon. Deputy Minister is staking, and therefore it is not question of increasing it from 25 per cent to 50 per cent. Probably in summing up the hon. Deputy Minister may have to clarify the position. But if that is acceptable then we have the second problem of exclusive clause to prevent the courts from entertaining matters -
I think this has got to be handled a little bit differently and I have asked the hon. Deputy Minister to consider that particular clause, because anytime we make laws that try to tie the hands of the courts, it has a different implication. Perhaps, if we can break the items into two and look at the 50 per cent deposit, if a person thinks that he is concerned and wants to go to court on the matter, it means that he may have something useful, otherwise, why will he go and incur an expenditure only to realize
later that he is going to pay that money? So perhaps, we need to be a little bit careful when we are excluding the Judiciary in matters of such nature. So perhaps by the time we reach the Consideration Stage, I would have sorted it out with the Minister and if possibly with the intention of removing it from the law and keep the 10(1) which says that, we feel that one must pay 100 million; if one is trying to challenge it, one should pay 50 million and let us move forward. And then that would be on account [Interruption.] But if the person feels that he is not happy with that and he wants to go to court on that matter, he should be allowed and possibly this could be a better compromise. I may have a prior discussion with my hon. Colleague, the Minority Leader.
Mr. Speaker 11:45 a.m.
Hon. Majority Leader, are you therefore inviting me to put the Question?
Mr. Owusu-Adjapong 11:45 a.m.
Mr. Speaker, possibly after the hon. Deputy Minister has also clarified the 25 per cent, 50 per cent issue.
Mr. Kwaku Agyeman-Manu 11:45 a.m.
Mr. Speaker, this 25 per cent and the supposed increase to 50 per cent does not work in simple terms like hon. Sallas-Mensah is trying to say. Mr. Speaker, I have also worked as an Accountant. When you are served with provisional assessment, our current statutes oblige you to pay on quarterly basis. So the 25 per cent which goes to the first quarter should be paid within the first quarter.
So you have between January and March to make the first quarter payment. Normally, you are assessed for the whole year. Now when you protest, you pay nothing; and if it continues until a decision is made into the second quarter, it means that the first quarter payment did not come and Government also loses revenue and
Mr. Salllas-Mensah 11:45 a.m.
Mr. Speaker, on a point of order. Mr. Speaker, the hon. Deputy Minister is misleading the House. I have worked with the IRS and I know what is on the ground. When you object to any assessment you must pay 25 per cent of the first quarter before your objection would be processed. He should not mislead the House.
11. 55 a.m.
Mr. Speaker 11:45 a.m.
Hon. Deputy Minister, what is the situation?
Mr. Agyemang-Manu 11:45 a.m.
Mr. Speaker, I am very, very positive in my mind. I am very sure that is not the practice at the moment so what the amendment seeks to do is to ensure that when you object to the assessment, at least, you pay some portion of the first quarter's assessment that is due whilst we go ahead to do whatever we would do with the objection. That is what the amendment seeks to do, Mr. Speaker - [Interruption.]
Mr. Abuga Pele 11:45 a.m.
Mr. Speaker, I am surprised the hon. Deputy Minister is still insisting. What hon. Sallas-Mensah said is a fact and as someone who also worked with the Internal Revenue Service (IRS), I want to inform the hon. Deputy Minister that even if you object to your tax assessment for the year, you still have to pay a deposit on account; and it is twenty-five per cent. The fact that you have objected to your tax assessment does not prevent you or free you from paying a deposit on account.
Mr. Speaker 11:45 a.m.
Hon. Deputy Minister, you may continue.
Mr. Agyemang-Manu 11:45 a.m.
Mr. Speaker,
I want to reiterate again that if you look at the rendition of the assessment, it does not give any indication of what happens at the moment that we are going to increase. What we are saying is that it is a new thing that we are introducing so that if you object, at least, you would pay fifty per cent of the first quarter's assessment as and when we look at your objection and to make a decision on that. Mr. Speaker, I believe that would enhance our revenue inflows and if we get this amendment passed it would help us to actually collect the revenues that we should collect.
Mr. Speaker, I must say again that we were motivated very much with this because as we have seen, quite a number of companies and organizations use this sort of loophole to try to avoid taxes that they should pay to the State. And advance corporate taxes are principles that are accepted in tax administration all over the world so we ought to be a little bit surprised at the hon. Member's objection to the amendments that we are proposing. But Mr. Speaker, I would plead that we proceed and when we come to the Consideration Stage we also would look at the amendment hon. Sallas-Mensah wants to propose and probably we can come to a common thinking when we see what he wants to come with to counter the amendment we are proposing.
Mr. Speaker 11:45 a.m.
Hon. Deputy Minister, for clearer understanding, what is the present rate?
Mr. Agyemang-Manu 11:45 a.m.
Mr. Speaker,
the current situation is that when you get the assessment, which normally comes for the whole year, you are supposed to pay the first quarter and pay the second quarter and so on. Whether you object or not, you are supposed to pay the first quarter. When you object, Mr. Speaker, you pay nothing. You do not pay anything until IRS comes back with the revised assessment.
Mr. Speaker 11:45 a.m.
Hon. Members, whatever it is we would deal with it when it comes to the Consideration Stage -- [Interruptions.] But hon. Members, let me put the Question.
Question put and motion agreed to.
The Internal Revenue (Amendment)
Bill was accordingly read a Second time.
Suspension of Standing Order 128 (1)
Deputy Minister for Finance and
Economic Planning (Mr. Agyemang- Manu): Mr. Speaker, I beg to move, that notwithstanding the provisions of Standing Order 128 (1) which require that when a Bill has been read a Second time it shall pass through a Consideration Stage which shall not be taken until at least forty-eight hours have elapsed, the Consideration Stage of the Internal Revenue (Amendment) Bill may be taken today.
Mrs. Grace Coleman 11:45 a.m.
Mr. Speaker, I be to second the motion
Question put and motion agreed to.
Resolved accordingly.
BILLS - CONSIDERATION STAGE 11:45 a.m.
Mr. Speaker 11:45 a.m.
Hon. Chairperson, there
seems to be an addendum - [Pause.] Hon. Majority Leader, I have just seen an addendum here.
Mr. F. K. Owusu-Adjapong 11:45 a.m.
Mr. Speaker, the addendum is for the first one that we - [Pause.]
Mr. Speaker 11:45 a.m.
That is page 2?
Mr. Owusu-Adjapong 11:45 a.m.
Yes, Mr.
Speaker. Now they have included that so when we reach the other one I think hon. Sallas-Mensah can move it orally.
Mr. Speaker 11:45 a.m.
I am talking about the
proposed amendment to clause 1.
Mr. Owusu-Adjapong 11:45 a.m.
Hon. Chair-
person, if you can look at page 2 of the addendum, you seem to have a proposed amendment.
Clause 1 - Section 10 of Act 592
amended.
Mrs. Grace Coleman 11:45 a.m.
Mr. Speaker, I beg to move that in clause 1, line 1, delete “venture capital financing company” and insert “venture capital finance company” wherever it appears.
Question put and amendment agreed
to.
Mrs. Coleman 12:05 p.m.
Mr. Speaker, I beg
to move that in clause 1, line 2 delete “Venture Capital Fund Act” and insert “Venture Capital Trust Fund Act” wherever it appears.
Question put and amendment agreed
to.
Clause 1 as amended ordered to stand part of the Bill.
Clause 2 - 9 ordered to stand part of the Bill.

Clause 10 -- Section 131 of Act 592 amended.
Mr. Samuel Sallas-Mensah 12:05 p.m.
I beg to
move that clause 10, subclause (1), line 2, delete “fifty per centum” and insert “thirty
per centum.” So the clause will now read as follows:
“Where a person has lodged a notice of objection to an assessment under section 128, an amount of not less than thirty per centum of the amount payable as contained in the assessment shall be paid pending the determination of the objection of any appeal.”
Mr. Speaker 12:05 p.m.
So your figure is 30 per cent and not 25 per cent [Interruption] It is 30 per cent and not 25 per cent.
Mr. Sallas-Mensah 12:05 p.m.
Mr. Speaker, it is
30 per cent. We have consulted ourselves and we have agreed on 30 per cent.
Mr. Kweku Agyemang-Manu 12:05 p.m.
Mr. Speaker, I think the amendment is acceptable and I would want to urge the House to adopt it.
Mr. A. O. Aidooh 12:05 p.m.
Mr. Speaker, my
hon. Colleague said “not less than thirty per centum.” Mr. Speaker, that is very dangerous. It then means that the taxpayer can be asked to pay 100 per cent. So it should be the maximum; there should be a ceiling on that. It should not exceed 30 per cent maybe; but if we say not less than 30 per cent deposit, we can be asked to pay 100 per cent deposit; what he means is “not more than.” So instead of “not less than” it should be “not more than 30 per cent.”
Mr. Speaker 12:05 p.m.
Hon. Members, we
should be careful here. The amendment itself is saying “an amount of not less than fifty per centum,” so what is the proposed amendment?
Majority Leader (Mr. Felix Owusu- Adjapong) 12:05 p.m.
Mr. Speaker, the under- standing reached with the hon. Minister
Majority Leader (Mr. Felix Owusu- Adjapong) 12:05 p.m.


for Finance and Economic Planning is that we do not anticipate more than 30 per cent paid. So perhaps it will be better if we remove the words “not less” and make it straightforward, “30 per cent”. In which case there will be no problem and there will be no subjective analysis. So if we can get it done so that - “of 30 per cent” that is all we want.
Mr. Speaker 12:05 p.m.
Hon. Members, there is
a proposed amendment that it should be “30 per cent.”
Mr. Owusu-Adjapong 12:05 p.m.
Mr. Speaker,
“30 per cent” and the hon. Deputy Minister has agreed to that.
Question put and amendment agreed
to.
Mrs. Grace Coleman 12:05 p.m.
Mr. Speaker, I beg to move that clause 10, subclause (1), line 3, before the word “assessment” insert “notice of assessment.”
Question put and amendment agreed
to.
Mr. Sallas-Mensah 12:05 p.m.
Mr. Speaker,
I beg to move that clause 10, subclause (II), delete.
Mr. Speaker, if anybody challenges
the provisional assessment of the Internal Revenue Service (IRS), they have the right to go to court and have that provisional assessment determined. Because sometimes, the Revenue Agencies really do not have any concrete basis for raising some of those provisional assessments. For example, they can just increase last year's provisional assessment by 15 per cent for everybody in the country.
So although one might have filed an account showing a loss, they will still go ahead and just say that “Let us increase last year's provisional assessment by 15
per cent; “definitely one cannot be asked not to challenge such a provision; and I will definitely have to challenge it. If I challenge it at the IRS and they do not agree I will go to court and further pursue the matter.
Mr. Agyemang-Manu 12:05 p.m.
Mr. Speaker, I think this amendment is also acceptable and I would want to urge the House to adopt it.
Mr. Yileh Chireh 12:05 p.m.
Mr. Speaker,
I attended the meeting of the Finance Committee and I remember the officials who came indicated that the court procedures instrument that we have now require a certain fixed amount to guide them. Because it is leaving things in doubt in that procedure, particularly when we want the Fast Track Court and others to handle tax cases. That is why they thought that the Parent Act should be a guide as to how much we should pay down when we have made an appeal against the notice of assessment. So entirely deleting it, to me, may not have answered the question they raised and I do not know if any member of the Committee remembers the issue that I am raising.
Question put and amendment agreed
to.
Clause 10 as amended ordered to stand
part of the Bill.
Clause 11 - Commencement
Mr. A. O. Aidooh 12:15 p.m.
Mr. Speaker, I just
looked at clause 11 and I believe that there is an error here that needs correction.
Mr. Speaker, this Bill is supposed to implement some of the Budget provisions and to come into effect on the 1st of January, I believe, instead of the 31st. So I would wish to crave your indulgence
and that of my hon. Colleagues to have the figure or the word, “31st” amended to read “1st day of January, 2006.

Mr. Speaker, this was an agreement between both sides. I believe that this amendment is not violating article 107 of the Constitution my hon. Colleagues are trying to heckle me to that effect.
Mr. Speaker 12:15 p.m.
You are saying that 31st
Mr. A. O. Aidooh 12:15 p.m.
Mr. Speaker, I
Mr. Speaker 12:15 p.m.
What date?
Mr. A. O. Aidooh 12:15 p.m.
On the 1st of
January 2006. I thank you, Sir.
Mr. Speaker 12:15 p.m.
You were referring to
a certain provision in the Constitution to support this stand.
Mr. A. O. Aidooh 12:15 p.m.
Mr. Speaker,
the hon. Minority Leader was trying to indicate that - [Interruption] [Some hon. Members: He has not done so.] He was showing me the Constitution; I do not know what he meant by that gesture.
Mr. Speaker 12:15 p.m.
Hon. Deputy Minority
Mr. A. O. Aidooh 12:15 p.m.
Mr. Speaker,
my hon. Colleague, hon. Alban Bagbin showed me a copy of the Constitution of the country, I did not know what he meant by that.
Mr. Bagbin 12:15 p.m.
Mr. Speaker, I was looking at article 107, talking about retroactive legislation. I am saying that today is 1st February 2006 and if we pass this Bill today, and we are saying that it should take effect from the 1st of January 2006, we will be violating article 107 (b) of the 1992 Constitution. So I am saying
that we do not have any power to enact such a legislation because it is talking about taxation and therefore we will be imposing a burden, we will be imposing obligations and liabilities on persons of this country.
So I am saying that we have no option; it is mandatory and we cannot legislate in such a way. That was why I was drawing his attention to the fact that the anticipation of the 31st day of January was to the fact that they thought that by yesterday we would have passed the legislation. But now it did not take place, I want it to take its normal course and the day that it will come into force will be the day that they should start applying the provisions of the Act. Mr. Speaker, that is my position and I hope my hon. Colleague will agree to that and not to just claim that we have discussed and accepted this thing.
Mr. A. O. Aidooh 12:15 p.m.
Mr. Speaker, I wish I could - [Interruption.]
Mr. Speaker 12:15 p.m.
Hon. Deputy Majority Leader, may I give the floor to the Deputy Minister for Energy.
Mr. K. T. Hammond 12:15 p.m.
Mr. Speaker, if that was what the Leader was going to allude to then I will gain grounds. Mr. Speaker, my hon. Friend is completely wrong. He should have read the subclause (b) of that article together with what he finds in the first one and he would have known that there is a clear exception to what we are doing now. So if that was what hon. Aidooh was dealing with then he could deal with that.
Mr. A. O. Aidooh 12:15 p.m.
Mr. Speaker, in addition to what my hon. Colleague has said, I have looked at the Bill and I have also read article 107, and the prohibition against retroactive legislation is relating to Bills that retroactively impose any limitations or which adversely affect the personal rights and liberties of any person, or which imposes burdens, obligations or
Mr. Speaker 12:15 p.m.
Hon. Members, I think I will want to stand this down for further consideration and I want to draw your attention to articles 178 and 179 of the Constitution. You try and see if this can come within articles 178 and 179; that is how you must try and do it. So please, you may do consultations.
Mr. Bagbin 12:15 p.m.
Mr. Speaker, just a sharp reaction to that. When you look at article 178, it deals with withdrawals from the Consolidated Fund and when you look at article 182 it deals with public debt.
Mr. Speaker 12:15 p.m.
I was referring to articles 178 and 179.
Mr. Bagbin 12:15 p.m.
When you look at article 179 it is dealing with authorisation of expenditure, yes, estimates. But now we are talking about revenue generation; we are not talking about - [Interruption.]
Mr. Speaker 12:15 p.m.
Hon. Minority Leader, please, you look at it; you do not have to restrict yourself to the writings; you go into it and try and see not to I want to stand it down, so kindly go through this and see if this can be covered under article 179 at all, please, whilst we go on. [Interruption] I thought you were doing consultations. [Interruption] Hon. Member for Lawra/ Nandom, have you found any comfort in any of the provisions?
Dr. B. Kunbuor 12:15 p.m.
Yes, Mr. Speaker, it is because you have directed that there should be further consultations on this matter, but the issue that was raised is more fundamental than the narrow limit that we were supposed to consider. That is why I wanted to draw attention to the fact that when you are looking at its retroactivity, this is amending Act 592; Act 592 deals with the entire taxation in which an obstruction of the administration of the collection of income tax is a criminal offence for which you can be prosecuted under Act 592 which also goes with this amendment.
So to that extent, the consequences are quite grave than just to limit it to the fact that it is not capable of imposing burdens as the hon. Deputy Majority Leader sought to talk about. There are so many penal provisions in Act 592 to which this is an amendment that has very far-reaching consequences and imposes very onerous burdens that we have to look at beyond just the mere fact as if this will stand in isolation. It is an amendment to a parent legislation and in our consultations we should be looking at all those other ramifications of it.
Mr. Kyei-Mensah-Bonsu 12:25 p.m.
Mr. Speaker, I am of the opinion that if one looks at the memorandum of the Bill that we are considering, it justifies what the hon. Deputy Majority Leader, and perhaps the hon. Deputy Leader of the House said. [Hear! Hear!] Mr. Speaker, the memorandum, if I should quote, talks about this; and I am quoting -

“The purpose of this Bill is to amend the Internal Revenue Act, 2000 (Act 592) to effect changes to achieve the objective of the 2006 Budget Statement. The main thrust of the 2006 Budget Statement which was presented in November 2005 is to

provide tax concessions, incentives and reliefs. . .”

Mr. Speaker, we are here talking about incentives, reliefs and concessions, not obligations that is the thrust of it.

But Mr. Speaker, we are talking about tax payable quarterly; and the quarter of the year ends on 31st March, if I am right. Mr. Speaker, where does the quarter begin from? It begins from 1st January and once it ends on 31st March, one cannot say that it is retroactive.

Mr. Speaker, that is my understanding of it, because it ends on 31st March we are within the timeframe. So I believe that whatever hop, jump and step argument that we are making is neither here nor there. Mr. Speaker, we are within the law and I think we have not done anything wrong; we are not breaching the law. Mr. Speaker, that is my submission.
Mr. Speaker 12:25 p.m.
Hon. Members, I think we would have to do some consultation. Let us stand this down and do a bit of consultation. An hon. Member has also referred us to the Act itself, (Act 592) itself. So we need to read that too - Hon. Members, let us stand this thing down for some time and see how we can resolve it. As I said, an hon. Member has drawn our attention to the Act itself. Let us see whether there can be comfort in the Act 592 itself. Let us stand it down for some time whilst we go on with other matters.
Mr. Owusu-Adjapong 12:25 p.m.
Mr. Speaker, if we can take item 24 while I consult my hon. Colleague, the Minority Leader on the matter.
Mr. Speaker 12:25 p.m.
Item 24 Deputy Minister for Finance and Economic Planning?
Suspension of Standing Order 80 (1)
Deputy Minister for Finance and Economic Planning (Mr. Kwaku Agyemang-Manu): Mr. Speaker, beg to move, that notwithstanding the provisions of Standing Order 80 (1) which require that no motion shall be debated until at least forty-eight hours have elapsed between the date on which notice of the motion is given and the date on which the motion is moved, the motion for the Second Reading of the National Reconstruction Levy (Amendment) Bill may be moved today.
Mrs. Grace Coleman 12:25 p.m.
Mr. Speaker, I beg to second the motion.
Question put and motion agreed to.
Mr. Speaker 12:25 p.m.
Item 25 - Deputy Minister for Finance and Economic Planning?
National Reconstruction Levy (Amendment) Bill
Deputy Minister for Finance and Economic Planning (Mr. K. Agyemang- Manu (on behalf of Minister for Finance and Economic Planning): Mr. Speaker, I beg to move, that The National Reconstruction Levy (Amendment) Bill be now read a Second time.
Question proposed. Mr. Haruna Iddrisu - rose -
Mr. Speaker 12:25 p.m.
Hon. Member for Tamale South, do you have any observation?
Mr. Haruna Iddrisu 12:25 p.m.
Mr. Speaker, I have been trying to catch your eye; I am glad that I finally caught your attention. Mr. Speaker, the very arguments which the hon. Minority Leader articulated against the IRS issue which you have decided to stand it down are applicable to this same legislation. And I think that it is prudent that our time is not wasted on things which would raise questions of retroactivity.
Mr. Speaker 12:25 p.m.
Hon. Member, what you are suggesting is that we stand this down also?
Mr. Haruna Iddrisu 12:25 p.m.
Yes, Mr. Speaker.
Mr. A. O. Aidooh 12:25 p.m.
Mr. Speaker, I propose that we proceed; when we get there, we would know how to handle it. We should proceed. Mr. Speaker, I do not want to argue this point now, but I beg that we should proceed; when we get there he must raise his point and we shall answer him.
Mr. Speaker 12:25 p.m.
Hon. Member for Tamale South, the point which is being made is - [Pause.]
Mr. Haruna Iddrisu 12:25 p.m.
Mr. Speaker, I appreciate his intervention. Mr. Speaker, this House should not be bulldozed into exercising its right in contravention of the Constitution. It is not for nothing that we are standing down some of our Standing Orders. Under normal circumstances this ought to be taken through the mill and I am saying that what they have submitted, if you look at “commencement”, item 5 it says that this Act shall come into force on the first day of January 2006; if you look at section 4, clause 4, there is retroactivity in it. We cannot be legislating today and say that Mr. Speaker, with your permission, let me refer to the parent Act. The Parent Act under profits affected stipulated only 2001 and 2002, therefore, this House cannot pass a legislation and incorporate 2003 and 2004. It would be illegal.
Mr. Speaker 12:25 p.m.
Hon. Member let us cross the bridge when we get to it. Let the Chairperson move the report, and we shall deal with it in due course. Let her continue.
Chairman of the Committee (Mrs. Grace Coleman) 12:35 p.m.
Mr. Speaker, I beg to present the Report of the Finance Committee on the National Reconstruction Levy (Amendment) Bill.
1.0 Introduction
The National Reconstruction Levy (Amendment) Bill was laid in the House on Tuesday, 26 th January 2006 and referred to the Finance Committee for consideration and report in accordance with the 1992 Constitution and the Standing Orders of the House.
To consider the Bill, the Committee met with the Deputy Minister for Finance and Economic Planning, hon. Kwaku Agyemang-Manu and officials from VAT Service and Internal Revenue Service and reports as follows:
2.0 References
1. The 1992 Constitution of the Republic of Ghana;
2. National Reconstruction Levy Act, 2001 (Act 597); and
3. 2006 Budget Statement.
3.0 Object of the Bill
The object of the Bill is to amend the National Reconstruction Levy Act, 2001 (Act 597) to abolish and reduce some of the levies contained in the 2006 Budget Statement presented by the Minister for Finance and Economic Planning in year
2005.
4.0 Observations
4.1 The Committee observed that clause 1 repeals section 1 of the National Reconstruction Levy Act, 2001 (Act 597) which imposes a levy on other companies not mentioned in the Act.
4.2 That clause 2 amends the Act by reducing the rates of the levy on Class A and B companies which are mainly large and medium financial and insurance institutions from 7.5 per cent to 5.5 per cent and 5 per cent to 2.5 per cent respectively.
4.3 Members noted that the Bill also extends the importation of the levy from 2005 to 2006.
4.4 The Committee observed that the reduction in the rates of the levy on class A and B companies from 7.5 per cent to 5.5 per cent and 5 per cent to 2.5 per cent respectively will enable these companies retain these profits and therefore reinvest in their operations. 5.0 Conclusion
The Committee having carefully examined the B i l l r ecommends to the House to adopt its report and approve the National Reconstruction Levy (Amendment) Bill without any amendments.
Respectfully submitted.

Deputy Minister for Energy (Mr. K. T. Hammond): Mr. Speaker, I have been trying to catch your eyes all this while because I want to make a proposal or a suggestion which may be very helpful to the House.

Mr. Speaker, this matter under consideration has been recurring in this

House on regular basis.
Mr. Ayariga 12:35 p.m.
On a point of order. Mr.
Mr. Speaker 12:35 p.m.
Hon. Members, let him
go on with the debate.
Mr. Hammond 12:35 p.m.
Mr. Speaker, can I
Mr. Speaker 12:35 p.m.
I have not called you
yet.
Mr. Hammond 12:35 p.m.
Mr. Speaker, you called me.
Mr. Speaker 12:35 p.m.
Not yet, Deputy
Minister.
Mr. Hammond 12:35 p.m.
Mr. Speaker, what
Mr. Ayariga 12:35 p.m.
Mr. Speaker, since he
asked whether I am a lawyer, I want to let him know that I am one and that the Constitution is very clear. When I talk about advisory opinion, what I mean is for the Parliament of Ghana to call on the Supreme Court to advise us on this issue. The Suprement Court only gives - [Interruption] - The court renders its opinion on contentious matters before it by two contending parties - so not advisory opinion as the hon. Member sitting here and calling on the Chief Justice to advise him on article 179 of the 1992 Constitution.
Mr. Hammond 12:35 p.m.
Mr. Sepaker, he
obviously wants to make mockery of a very serious situation. If he has read the Constitution, then he knows that article 2 (1) says that any matter of constitutional importance should be referred to the Supreme Court for interpretation. That is what I mean.
Mr. Speaker 12:35 p.m.
Deputy Minister, we
want to make progress.
Mr. Hammond 12:35 p.m.
Mr. Speaker, so what
I mean is that to help the whole House would it not be apt for this matter to at least be submitted to the highest court for a clarification since everyday we are arguing about this. Is this a legislation that
Dr. A.A. Osei 12:35 p.m.
On a point of order. Mr. Speaker, with all due respect to my Senior Colleague, I think that the lawyers in here have been intimidating us for too long. You have already advised us that the Leadership would consult and come up with an appropriate thing and all these brilliant lawyers are trying to show us that they could go to the Supreme Court because that is an appropriate forum for that. So if you can advise that they curtail the debate and we move on, we would appreciate it.
Mr. Speaker 12:35 p.m.
Hon. Members, we are dealing with the National Reconstruction Levy (Amendment) Bill.
Mr. Hammond 12:35 p.m.
Mr. Speakers, he is not being fair - [Interruption.]
Mr. Speaker 12:35 p.m.
I have not called you. In the absence of any further - [Interruption.]
Question put and motion agreed to.
The National Reconciliation Levy (Amendment) Bill was accordingly read a Second time.
Suspension of Standing Order 128 (1)
Mr. Agyemang-Manu 12:35 p.m.
Mr. Speaker, I beg to move, That notwithstanding the provisions of Standing Order 128 (1) which require that when a Bill has been
read a Second Time it shall pass through a Consideration Stage which shall not be taken until at least forty-eight hours have elapsed, the Consideration Stage of the National Reconstruction Levy (Amendment) Bill may be taken today.
Mrs. Coleman 12:35 p.m.
Mr. Speaker, I beg to second the motion.
Question put and motion agreed to.
Resolved accordingly.
BILLS - CONSIDERATION STAGE 12:35 p.m.
Mr. A. O. Aidooh 12:35 p.m.
Mr. Speaker, I see a minor mistake in clause 3(4) which I believe we can amend. Mr. Speaker, if you look at the Memorandum, the clause that relates to clause 3, the fourth paragraph reads as -
‘Clause 3 extends the imposition of the levy from 2005 to 2006.' So Mr. Speaker, I believe we have to delete the years 2001, 2002, 2003 and 2004 so that it will conform with the intendment of the Bill. So Mr. Speaker, I beg to move that in clause 3 delete “2001, 2002, 2003, 2004.”
Question put and amendment agreed to.
Clause 4 as amended ordered to stand part of the Bill.
Mr. Speaker 12:45 p.m.
Clause 5, is there any proposed amendment on that?
T h e h o n . M e m b e r f o r S e f w i Akontombra, do you have any amendment?
Mr. Herod Cobbina 12:45 p.m.
Mr. Speaker, looking at the levy which we are talking about and looking at the interactive law, I know this is the levy insurance companies pay and we are reducing the levy for them. We are saying that today is 1st February. So I want to suggest that if we would be - so that you would look at it again and step it down, so that it takes care of the other issues which would be considered; today is 1st February. As at now, there is no burden, but there is a burden because it is a levy which the insurance companies and other houses pay.
Mr. Speaker 12:45 p.m.
Hon. Member, that is why I am asking you whether you are formulating an amendment; Or is it only a comment, an observation? Alright, then you may sit down, if it is an observation.
Question put and motion agreed to.
Clause 5 ordered to stand part of the Bill.
The Long Title ordered to stand part of the Bill.
Mr. Speaker 12:45 p.m.
We have come to the end of the Consideration Stage, in respect of the National Reconstruction Level (Amendment) Bill, 2006.
Hon. Members, we move to item 28 on the Order Paper. Minister for Finance and Economic Planning?
Suspension of Standing Order 131(1)
Deputy Minister for Finance and Economic Planning (Mr. Agyemang- Manu on (behalf of) the Minister for Finance and Economic Planning):
Mr. Speaker, I beg to move, That notwithstanding the provisions of Standing Order 131 (1) which requires that when a Bill has passed through the Consideration Stage, the Third Reading therof shall not be taken until at least twenty-four hours have elapsed, the motion of the (Amendment) Bill may be moved today.
Mrs. Coleman 12:45 p.m.
Mr. Speaker, I beg to second the motion.
Question put and motion agreed to.
BILLS - THIRD READING 12:45 p.m.
Mr. Owusu-Adjapong 12:45 p.m.
Mr. Speaker, if we can now take item 9, since we have now got the addendum.
Mr. Speaker 12:45 p.m.
Hon. Members, we go back to item 9. Majority Leader, we were dealing with clause 10, is that not it?
Mr. Owusu-Adjapong 12:45 p.m.
We are to do the Consideration Stage of the Bill we stood down, the Value Added Tax (Amendment) Bill, where we have two amendments proposed by hon. P. C. Appiah-Ofori.
Mr. Speaker 12:45 p.m.
Majority Leader, there was something we stood down for consideration.
Mr. Owusu-Adjapong 12:45 p.m.
When we finish with that one we would then take the other one. Mr. Speaker, these are all Financial Bills. We can start with the VAT Bill and then take the Internal Revenue Bill as the last one.
BILLS - CONSIDERATION STAGE 12:45 p.m.
Mr. Appiah-Ofori 12:45 p.m.
Mr. Speaker, there is an amendment.
I beg to move, clause 1, line 5, delete “cutlasses” and insert “all other agricultural implements or tools” As I said earlier, Schedule 2 to the Act reads and with your permission I quote:
The Value Added Tax Act, 1998 Act 564) referred to as the “principal enactment” is amended to Schedule 2 by the insertion after item, No. 2 of the following new items: (4) Locally manufactured agricultural machinery and cutlasses.
I have consulted the Deputy Attorney- General, hon. Owusu-Ansah, and he suggests that I should recommend the deletion of “cutlasses” and my amendment is “and all other agricultural implements and tools” to cover “cutlasses” - [Interruptions] Yes, already it is there as locally manufactured agricultural machinery and all other agricultural implements and tools.
Mr. Speaker, the purpose is to make sure that hoes and other implements used in the production of food, both in the north and south and any part of the country, also enjoy zero-rated VAT status. If we confine it to only cutlass, then we are saying that VAT on hoes and other implements should be charged; and that would be most unfair. So I beg to move this amendment.
Mr. Speaker 12:45 p.m.
Hon. Member for Asikuma-Odoben-Brakwa, first of all your formulation of this amendment ought to be clear to me at this stage.
Mr. Appiah-Ofori 12:45 p.m.
Mr. Speaker, what I am saying is that (4) should read: “locally manufactured machinery, implements and tools,” so that all other implements used by our rural folk would be zero-rated.
Mr. Speaker 12:45 p.m.
Hon. Member, I see your proposed amendment. Are you amending your proposed amendment?
Mr. Appiah-Ofori 12:55 p.m.
Yes Sir, that was what I said earlier.
Mr. Edward Salia 12:55 p.m.
Mr. Speaker,
I beg to support the amendment and I do so because there are a lot of locally manufactured tools and implements other than cutlasses. We have sickles, we have shears and various other tools and implements that are locally manufactured in some local factories and even by blacksmiths, and I think that a useful purpose will be served if they were also zero rated.
Mrs. Grace Coleman 12:55 p.m.
Mr. Speaker,
I was just supporting the “locally manufactured.” To me, Mr. Speaker, “locally manufactured” covers all these items we are trying to enumerate. So I thought all locally manufactured agricultural machinery and tools should be enough to cover this.
Mr. Owusu-Adjapong 12:55 p.m.
Mr. Speaker,
originally I had no problem with the suggestion made by the hon. P. C. Appiah- Ofori regarding “other agricultural implements,” because I took it that the implements would have saved the situation that these sickles and others we are talking about; they are all agricultural
implements. But if we are now talking about tools then it means that the person interpreting would have to find out what are tools and what are implements, and there we would have a problem. And like it is being asked, if there are locally manufactured fishing nets, fishing boats and things like that, then we may go into some problem.
So if we can be sure why agricultural implements will not suffice for the items mentioned so that we now need to add some other statement to cover it, this is my worry. So we need to be a bit careful and get some further explanation as to why we now want to add the word “tools.”
If it had been “agricultural implements or tools”, then it means you have - But it says, “and tools,” which means there must be something different. And so with fishing nets, are we saying that fishing nets should be covered?
Mr. Speaker 12:55 p.m.
Hon. Member for
Jirapa, you supported the amendment.
Mr. Salia 12:55 p.m.
Mr. Speaker, I supported
it and I believe that “implements” for instance, are things like bullock ploughs, donkey carts; those are the implements. The “tools” are also a little different. A tool might not necessarily be an implement. So when you add both implements and tools, it covers a host of items that we are talking about. But if we leave it to implements alone it might not extend to tools, and they are also locally manufactured for the purpose of agriculture.
Mr. Speaker 12:55 p.m.
Majority Leader, can
we not get consensus on this proposed amendment?
Mr. Owusu-Adjapong 12:55 p.m.
Mr. Speaker,
in such situations we try to see whether
Mr. Speaker 12:55 p.m.
Majority Leader, do
you need time to consult?
Mr. Owusu-Adjapong 12:55 p.m.
Mr. Speaker,
it will not take long, so we can then handle the matter deftly with left unless any of our legal Colleagues has a quick solution. We can then go back to the Internal Revenue Department and by the time we finish we would have got the dictionary to work on it.
Mr. Speaker 12:55 p.m.
Minority Leader, what
is your thought?
Mr. Bagbin 12:55 p.m.
Mr. Speaker, I actually
do not see any controversy. I think that the attempt is to make sure that all locally manufactured agricultural machinery, implements and tools - there are differences between implements and tools, just like how there are differences between machinery and implements, and then also instruments. So Mr. Speaker, I think that the policy focus is to encourage the local industry to manufacture these apparatuses for agricultural production, and therefore words that are meant to cover all should be included.
And I think that - well, I am not calling for the inclusion of “apparatus,” - [Laughter.] No, I am trying to get a general term that will cover all the items. So Mr. Speaker, I will agree with those proposing that we should mention “implements” and “tools” in addition to the “machinery.” It will cover all the locally manufactured items for agricultural
Mr. Speaker 12:55 p.m.
Chairman of the
Committee, is this acceptable to you?
Mrs. Coleman 12:55 p.m.
Mr. Speaker, I have
Mr. Speaker 12:55 p.m.
Chairman of the
Mrs. Coleman 12:55 p.m.
Mr. Speaker, I want to read “tools” and “implements” so that we know, we see. Mr. Speaker, it says, “implements - implement means a tool.” You see, it means so long as we say “implement” - [Interruptions.] Yes, I am reading. ‘implement' means a tool, a modern” - [Uproar.] Mr. Speaker, so long as “implement” means “tool”, I think it is only fair that we put “implement” and not go into little things like “tools.” Mr. Speaker, I was worried about that because in the beginning, we learnt that even needles are used by farmers -- I am talking about fishermen and so on, to mend their nets; they are implements. These are things they manufacture locally and therefore I think that it is right that they are also considered in this. The dictionary is saying that implements also includes tools and therefore do we want to say “implements”, “tools”, “whatever”. Do we want to say all that?
Mr. J. H. Mensah 12:55 p.m.
Mr. Speaker,
another aspect of this matter In this type of legislation, we say we are trying to help agriculture, but if we take the common spade or shovel it is a tool of multiple use in construction, and so on. So I think that in the application of such a law, if we should pass it, it will be difficult for the administrators of the law to know which spades are for agriculture and which spades are for construction. So let the Committee
which is going to consider this matter try and get the definition so that we know we are helping agriculture. Otherwise, if it is too broad, we want to support all locally manufactured implements, then let us say so and not talk about agriculture. I think we are confused here.
Mr. Speaker 1:05 p.m.
Hon. Majority Leader, would you want us to stand this down for the next few minutes to enable you put your heads together?
Mr. Owusu-Adjapong 1:05 p.m.
Mr. Speaker, I think we have enough information for hon. Members to make up their minds as to what they want to achieve. We have been given the definition of “implement” as “a tool”, from the dictionary. Then we have “tool” meaning “any device or implement used to carry out mechanical functions, whether manually or by machine.” So it is for us to decide whether we think that we need the tool or implement. This is not a matter that we should defer, so let us go on. I would have been comfortable with the use of the word ‘implement' without adding the ‘tool'. But if the thinking is that some things would be lost, le the majority decide.
Mr. Speaker 1:05 p.m.
Hon. Members, there is a proposed amendment here, which has been supported by the hon. Member for Jirapa; and we want to vote on that.
Mr. Kyei-Mensah-Bonsu 1:05 p.m.
Mr. Speaker, I just want to get ourselves out of this quagmire. Instead of saying “implement and tool,” we could say “implement or tool”?
Mr. P.C. Appiah-Ofori 1:05 p.m.
I am, indeed, comfortable with it, “implement or tool'” provided these two words are there.
Mr. Speaker 1:05 p.m.
Hon. Member for Jirapa, you supported the amendment
Mr. Salia 1:05 p.m.
Mr. Speaker, I accept the amendment.
Question put and amendment agreed to.
Clause 1 as amended ordered to stand part of the Bill.
Clause 2 - section 25 of Act 546 amended.
Mr. Speaker 1:05 p.m.
There is also an amendment. Hon. Member for Asikuma- Odoben-Brakwa, you may move your amendment.
Mr. P. C. Appiah-Ofori 1:05 p.m.
Mr. Speaker, I beg to move, clause 2, subclause (1) paragraph (a), line 3, after “period” insert “and the total export proceeds have been repatriated by the importers' banks to the exporters' authorised dealer banks in Ghana.”
Mr. Speaker, I have indicated that if the Bills stands as it is, we will be making opportunities for manufacturers of non- traditional exports to defraud the state in revenue. Mr. Speaker, section 1 (b) of the Export and Import Act, 1995 states and
Mr. Speaker with your permission I quote 1:05 p.m.
“Any person may escort goods from Ghana for commercial purposes if that person completes the Ghana Export Form in the case of non- traditional export goods.”
Mr. Speaker, what manufacturers of non-traditional exports do to defraud the State, through value added tax (VAT), is that since exports are zero-rated, in other words, since exports do not attract VAT, what some of them do is to complete the export form and send it to the harbour or the borders, and they succeed in getting the Customs, Excise and Preventive Service (CEPS) to stamp them as evidence of the goods having crossed the border
whilst, in fact, the goods must have been sold in Ghana and VAT having been collected. And because it is zero-rated, they appropriate the VAT collected and leave the Government without this money. This law is going to compound it.
Now, input VAT is being taken care of. But when input VAT is paid by importers of inputs for the manufacture of non- traditional goods, this inputs VAT also should be paid back to the exporters. So having used this means to defraud the state, in spite of the output VAT, they are now going to be aided, under this law, to also claim input VAT.
Mr. Speaker, if this allowed, then we are heading for problems.
So there may be a way out. The way out is that, whoever is going to make this claim may show evidence of the goods having crossed the order and the proceedings having returned to Ghana. If the export proceeds are repatriated to Ghana, then it is true that the goods were exported and therefore, such refunds would be made to the exporter. Mr. Speaker, if you do this, you prevent the fraudulent ones who have been duping the nation from continuing to achieve their purpose. It is on the strength of this that I move this amendment; that after “period,” insert “and the total export proceeds have been repatriated by the exporters' bank to the exporters' authorized dealer bank in Ghana.”
Once the money has gone through the banking system, and in accordance with Bank of Ghana Notice Number BG FO/91/19 of 28th June 1991, Ghana would be covered; the fraud would be prevented and the revenue due to Government would be paid. So I urge everybody to support me so that together we prevent this fraud.
Mrs. Grace Coleman 1:05 p.m.
Mr. Speaker, I stand to support this amendment. Mr. Speaker, there have been many occasions
Mrs. Grace Coleman 1:05 p.m.


when the Government innocently introduced a Bill or an amendment to a Bill and at the end of it, we find out that we have opened a way for people to dupe the Government, by our own actions. The one just illustrated is one of the ways in which people do it. So this amendment will prevent people or will make it difficult - You have to come and prove that the proceeds are here, before you can access any moneys' and I think doing that would help us all and will prevent people from taking too much moneys from the Government, which are not due them. So Mr. Speaker, I support the amendment.

Question put and amendment agreed to.

Clause 2 as amended ordered to stand part of the Bill.

Clause 3 ordered to stand part of the Bill.

Long Title ordered to stand part of the Bill.
Mr. Yieleh Chireh 1:05 p.m.
Mr. Speaker, we moved an amendment and removed ‘cutlasses' from clause 1, therefore, the Long Title must necessarily reflect that change.
Mr. Speaker 1:05 p.m.
Thank you very much for this observation. I am sure the draftsmen would take this into account.
Suspension of Standing Order 131 (1)
Mr. Kwaku Agyemang-Manu 1:05 p.m.
Mr. Speaker, I beg to move, that notwithstanding the provisions of Standing Order 131(1) which require that when a Bill has passed through the Consideration Stage, the Third Reading thereof shall not be taken until at least twenty-four hours have elapsed, the motion for the Third Reading of the Value Added Tax (Amendment) Bill, 2006 may be moved today.
Mrs. Grace Coleman 1:05 p.m.
Mr. Speaker,
I beg to second the motion.
Question put and motion agreed to.
Resolved accordingly.
Mr. Speaker 1:05 p.m.
Hon. Majority Leader, what is the next item?
Mr. Owusu-Adjapong 1:05 p.m.
Mr. Speaker, we will look at the unfinished business, item 21, The Internal Revenue (Amendment) Bill.
Mr. Speaker 1:05 p.m.
Is that the one we stood down?
Mr. Owusu-Adjapong 1:05 p.m.
Yes, Mr. Speaker.
Mr. Speaker 1:05 p.m.
Hon. Members, we got to clause 11, did we not?
Mr. Owusu-Adjapong 1:15 p.m.
We were
at clause 11. Mr. Speaker, we had consultation and the first advice we got from a tax expert was that if we fix the date say on 1st February, it is technically possible but it would involve some difficult computation and therefore that was not the best option.
The other one was the problem of 1st January 2006; there was this problem that we may not be too clear whether we are not offending the Constitution. Whilst I would not like this matter to rest now we would possibly suggest that we do further work on it. We agree that the safest option
for the moment is to delete that clause 11 and be silent on the matter. After all this is a continuing Act, a Bill to enforce an existing Act and therefore it means that when it comes to implementation that will be handled by them; and then maybe later on we could seek further advice and see whether articles 178 and 179 would be relevant so that we save ourselves for the moment. But definitely, we would come back to this one day and settle the matter once and for all, as to at what time we can go against retroactive laws. So this is the conclusion we arrived at.
Mr. Speaker 1:15 p.m.
Hon. Members, the proposed amendment therefore is that we delete clause 11.
Question put and amendment agreed to.
The Long Title ordered to stand part of
the Bill.
Suspension of Standing Order 131 (1)
Mr. Agyemang-Manu 1:15 p.m.
Mr. Speaker.
I beg to move, That notwithstanding the provisions of Standing Order 131(1) which require that when a Bill has passed through the Consideration Stage, the Third Reading thereof shall not be taken until at least twenty-our hours have elapsed, the motion for the Third Reading of the Internal Revenue (Amendment) Bill may be moved today.
BILLS - THIRD READING 1:15 p.m.
BILLS - SECOND READING 1:15 p.m.
Chairman of the Committee (Mrs. E. Esther Obeng) 1:25 p.m.
Mr. Speaker, I beg to present the Report of the Committee. Introduction
The Ghana National Commission on Children (Repeal) Bill was introduced and read the First time in the House on Tuesday, 25th October 2005. It was referred to the Committee on Gender and Children for consideration and report in accordance with Order 175 of the Standing Orders of Parliament.
Background
The Ghana National Commission on Children (NCC) since its establishment on 29th August 1979 by the AFRCD 66 has moved from our ministerial sector to another over the years. Initially it was under the office of the Chairman of the AFRC, and moved to the Office of the Government Machinery at the Castle. In 1990, the Commission was placed under the Ministry of Mobilisation and Social Welfare.
And finally, in 1991 the responsibility of the Commission was reverted to the PNDC Secretariat at the Castle.
With the creation of the Ministry of Women and Children's Affairs in 2001 it was decided that the Commission becomes the main implementing agency for matters related to children under the Ministry.
References
The Committee in its deliberations made reference to the following documents:
The Constitution of the Republic of Ghana
The Standing Order of the
Parliament of Ghana. Deliberations.
In considering the Bill, the Committee held a meeting with the hon. Minister for Women and Children's Affair, Hajia Alima Alhassan, the Deputy Minister and the officials from the Ministry.
Acknowledgements.
The Committee wishes to express its gratitude to the Minister, her Deputy and the officials of the Ministry.
Purpose of the Bill.
The Bill seeks to repeal the Ghana National Commission on Children Decree 1979, (AFRCD 66) and to convert the Commission to a Department of the Ministry of Women and Children's Affairs.
Provisions of the bill.
Clause 1
The Committee recommends that Clause 1 becomes a sub-clause (1) and the inclusion of two new sub-clauses (2) and (3) to read as follows:
“(2) Ghana National Commission Children (GNCC) in now converted to a Department of the Ministry of Women and Children's Affairs;
(3) The designation of the head of the Department shall be Director in conformity with what pertains in Civil Service;”.
Conclusion.
Mr. Speaker, the Committee, having examined the Bill, recommends the adoption of the above clauses without
amendments. Consequent ly, the Commit tee
recommends to this august House to approve its report on the National Commission (Repeal) Bill.
Respectfully submitted.
Question put and motion agreed to.
The Ghana National Commission on Children (Repeal) Bill was accordingly read a Second time.
Mr. Speaker 1:25 p.m.
Hon. Deputy Majority Leader, at this stage, what is your wish?
Mr. A. O. Aidooh 1:25 p.m.
Mr. Speaker, I do not know what your pleasure is, but we have these Questions which we stood down.
Mr. Speaker 1:25 p.m.
Unfortunately, the hon. Minister for Energy was not here at the time that we called him and - What is the time now? It is about 1.30 p.m. Would it be possible for him to come tomorrow?
Mr. A .O. Aidooh 1:25 p.m.
Mr. Speaker, in the circumstances, I beg to move that we adjourn proceedings until tomorrow at 10 o'clock.
Mr. Bagbin 1:25 p.m.
Mr. Speaker, I beg to second the motion.
Question put and motion agreed to.
ADJOURNMENT 1:25 p.m.
  • The House was accordingly adjourned at 1.27 p.m. till 2nd February 2006 at 10.00 a.m.
  • [MRS. ESTHER OBENG