Mr. Speaker, I beg to second the motion.
Question put and motion agreed to.
Request for Waiver of Stamp Duty for Cocoa Purchases
Nii Mante: Mr. Speaker, I beg to move, that this honourable House adopts the Report of the Finance Committee on the Request for waiver of Stamp Duty on a receivables-backed Trade Finance Facility of US$1,000,000,000.00 for cocoa purchases by ghana Cocoa Board for the 2008/2009 crop season.
Mr. Speaker, in so doing, may I present to you your Committee's Report.
Mr. Speaker, the above request for Stamp Duty waiver was laid in the House on Tuesday, 11th November, 2008 and referred to the Finance Committee for consideration and report in accordance with article 174 (2) of the Constitution and Standing Orders of the House.
In its deliberations on the request, the Committee met with the Deputy Minister for Finance and Economic Planning, hon. Prof. george gyan-Baffour, officials from the ghana Cocoa Board and the Ministry of Finance and Economic Planning and submits this report.
The ghana Cocoa Board contracts receivables-backed trade finance facility annually to finance cocoa purchases and
other payments to stakeholders, which normally commence in October each year. This arrangement has been in place since 1994.
This year, over twenty-five (25) international financial institutions and three (3) local banks were involved in arranging the facility amounting to US$1,000,000,000.00 for the ghana Cocoa Board. The agreement on the facility was signed on 3rd September, 2008 in Accra.
3.0 Stamp Duty
Section 32 (6) of the Stamp Duty Act, 2005 (Act 689), mandates that for documents to be executable, valid and enforceable in ghana, such documents would have to be stamped.
However, the Commissioner of Internal Revenue is empowered under sections 158 (2) and 113 (4) of the Internal Revenue Act, 2000 (Act 591) to waive Stamp Duty subject to approval by Parliament.
4.0 Total Waiver
The total Stamp Duty to be waived on all the documents covering the facility is ten million dollars (US$10,000,000.00), thus one per cent of one billion dollars (1% of US$1,000,000,000.00).
The Committee observed that the facility did not require government guarantee, as it is a receivables-backed loan facility.
Since it is not a loan contracted by government, it does not require
The Deputy Minister however informed the Committee that the Facility Agreement requires ghana Cocoa Board to take steps to obtain a waiver of stamp duty for the facility.
The Committee took note of the fact that over the years, the cocoa industry has played a major role in the economic development of ghana. It has continued to play this role in terms of its contribution to gross Domestic Product (gDP), employment generation, and as a major source of foreign exchange earnings. The sector has also made substantial contribution to revenue generation through the payment of export duty, inter alia.
The technical team from the ghana Cocoa Board informed the Committee that the country has a target of producing one million tonnes of cocoa per year and that the ghana Cocoa Board is working to make this a reality.
After carefully examining the request and satisfying itself of the key role played by the ghana Cocoa Board in the country's economy and the strategic nature of the facility to ghana Cocoa Board's operations, the Committee finds the request to be necessary for the smooth operation of the Board with regard to cocoa purchases for the 2008/2009 crop season.
The Committee recommends to the House to adopt this Report and approve by resolution, the waiver of Stamp Duty of 1 per cent (amounting to US$10 million; equivalent to approximately gH¢11,000,000.00) on a receivables- backed Trade Finance Facility of
US$1,000,000,000.00 for cocoa purchases by the ghana Cocoa Board for the 2008/2009 crop season in accordance with article 174 (2) of the 1992 Constitution of the Republic of ghana.