30% income tax rebate not enough – Hotels Association

The Ghana Hotels Association says its expectation was not met in the recently delivered 2021 budget statement.

According to the association, it expected more policies that will help the ailing industry get back on its feet.

Speaking to Citi Business News, President of the Ghana Hotels Association, Dr Edward Ackah-Nyamike said the hotel industry will require more than the rebate to recover from the impact of the COVID-19 pandemic.

“Under normal circumstances and in normal times, the 30% rebate on income tax announced by the government in the 2021 budget statement would have been very good news in fact we would have welcomed it wholeheartedly. However, you and I know that we are not in normal times. And for an industry like the hotel industry that is yet to embark on significant recovery, a stimulus package or support that focuses on the input end of our businesses would have been better appreciated than one that focuses on the output end.”

He added that “What I mean is that the 30 percent rebate on income tax is based on the assumption that hoteliers will make some profits in the stipulated period, but the reality on the ground is that it will be a big miracle for any hotel to declare profit for 2020, 2021 or even the next year 2022. Indeed, as a result of the pandemic hotels have incurred huge debts that will take them a while to recover, that is our reality, and we expected the government to address that and not to tease us with this 30 percent rebate on income tax”

Government as part of its broader economic recovery plan to get the Ghanaian economy back to its previous state announced in the 2021 budget a corporate income tax rebate of 30% to companies within the arts, entertainment, and hospitality sectors.

Minister for Parliamentary Affairs and interim Finance Minister, Osei Kyei-Mensah-Bonsu made this known during the 2021 budget statement and economic policy presentation in Parliament on Friday, March 12, 2021.

He stated that “The government will provide corporate income tax rebate of 30% to companies hard hit by COVID-19 pandemic for Quarter 2 to Quarter 4 of 2021. Targeted companies include those in the accommodation and food services, education, arts and entertainment, and travel and tour operators.”

The tax rebate will be the second step government has taken to help cushion people in the entertainment and hospitality sectors against the COVID-19 effects.

Already, the National Board for Small Scale Industries (NBSSI) has disbursed GH¢37 million to creative arts practitioners who applied for loans under the Coronavirus Alleviation Programme Business Support Scheme (CAPBuSS).

The hospitality industry has been one of the worst-hit since the outbreak of the COVID-19 pandemic with many businesses in the sector shutting down while others were compelled to downsize.