Rejoinder: How a hotel was designated as 1D1F and granted $4 million tax exemption 

Following The Fourth Estate’s report on how a hotel was designated as a One District, One Factory (1D1F) project and granted a $4 million tax exemption, the Chairman of the Finance Committee in Parliament, Kwaku Kwarteng, sent us a rejoinder to the story. As dictated by our editorial policy, we publish the rejoinder verbatim.

STATEMENT:

 CLAIMS THAT A HOTEL HAS BEEN DESIGNATED AS A FACTORY AND GRANTED ONE-DISTRICT-ONE-FACTORY TAX EXEMPTION ARE FALSE

The attention of the Finance Committee of Parliament has been drawn to claims in the public domain that the Ministry of Finance had requested, and Parliament (upon the recommendation of the Finance Committee) had granted tax exemption under a one-district-one-factory programme for the construction of a hotel. These claims are false.

Nowhere in the Minister for Finance’s memorandum to Parliament was there any reference to the one-district-one-factory initiative. Please find attached the Minister for Finance’s memorandum to Parliament, which has been in public records since July 2022 when it was laid.

Paragraph 1.1 of the report states as follows:

“Parliament is respectfully invited to consider and approve the waiver of Import duties, Import NHIL, Import GETFUND, Import VAT, and EXIM levy and domestic VAT, amounting to Ghana Cedi equivalent of Six Million, Three Hundred and Eighty-Nine Thousand and Four Hundred and Twenty-Eight United States Dollars (US$6,389,428) in favour of 4-MAC Ltd a wholly Ghanaian owned Limited Liability Company incorporated in Ghana who is applying for a Strategic Investor, under section 26 (4) of the GIPC Act 2013, Act 865 on materials and equipment for the development of the Meridien Hotel.”

The claims are inaccurate, and we respectfully urge the general public to disregard them.

It is not hard to see that the inaccurate publications relied on references to one-district-one-factory in the Finance Committee’s report on the referral. Those references in the Committee’s report were unnecessary and erroneous. They were immaterial to the Committee’s recommendation to Parliament.

Indeed, paragraph 5.2 on page 5 of the Committee’s report (copy here attached), states the justification for the Committee’s recommendation as follows:

“The Committee noted that Subsection 4 of the Ghana Investment Promotion Centre (GIPC) Act 2013, Act 865, authorizes the board of the Authority to negotiate specific incentive packages for strategic investments in addition to the incentives available to any enterprise under the tax, customs and other laws. This is for the purpose of promoting identified strategic or major investments. The Board of GIPC have therefore satisfied itself that the Construction of the Le MERIDIEN Hotel is a strategic investment that deserves to be supported under this Act and intends to extend the needed support to the investors to realise their objective.”

So, it is evident from all the records that the Ministry of Finance’s request for a tax waiver of US$6,389,428 was in favour of Mac4 Ltd as a strategic investor under the GIPC Act, 2013, and the approval of a reduced figure of US$3,919,628 by Parliament (upon the recommendation of the Finance Committee) was also in accordance with same.

We respectfully urge the general public to take note of this correction.

Thank you.

Kwaku Kwarteng

(Chairman, Finance Committee of Parliament)