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 Offshore Syndicated Trade finance facility amounting to US$1,200,000,000.00 for the 2009/2010 year cocoa purchases by Ghana Cocoa Board.
The request for waiver of stamp duty on Offshore Syndicated Trade Finance Facility amounting to one billion, two hundred million United States dollars for cocoa purchases by the Ghana Cocoa Board (COCOBOD) for the 2009/2010 crop year was laid in the House on Tuesday, 17th November, 2009 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 Fifi Fiavi Kwetey, 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 Offshore Syndicated 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, the facility amount of US$1,200,000,000.00 for cocoa purchases was signed on 25th September, 2009 in Paris.
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 t o t a l S t amp Du ty t o be waived on all the documents covering the facility is twelve million dollars (US$12,000,000.00), thus one per cent of one billion, two hundred million dollars (1 per cent of US$1,200,000,000.00).
Attachment: Please, find attached a letter from the Commissioner of Internal Revenue Service providing the assessment of the Stamp Duty payable on the facility.
The Committee observed 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 hard to make this a reality.
Actual production for the 2008/2009 crop year was 710,638 metric tonnes. It is estimated that production would reach 700,000 tonnes for the 2009/2010 season for which this loan facility has been contracted.
Officials from the Ghana Cocoa Board (COCOBOD) informed the Committee that 394,000 metric tonnes of cocoa beans have been collateralized for the service of the US$1.2 billion facility contracted for the 2009/2010 cocoa year. Based on current international prices of the commodity, this quantity of cocoa was said to be enough to settle the entire loan