Ghana: Creative industry criticises COVID-19 tax rebate

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This month marks a year since Ghana began to grapple with the COVID-19 health crisis. The effects of the pandemic were instant and widespread, and even now, many sectors, including the West African country’s arts, entertainment and hospitality industries, are yet to begin the road to recovery.

Ghana’s Minister for Parliamentary Affairs and caretaker Finance Minister Osei Kyei-Mensah-Bonsu.
President Nana Akufo-Addo’s government has instated measures to manage the spread of the virus, including a lockdown in major cities and restrictions on social functions. This means that the creative sector, whose revenue streams relied heavily on public events, is taking a major hit.

The past 12 months have seen complaints by creative entrepreneurs who say they are unable to cope with the growing financial weight of the pandemic on their operations. While virtual events have become a growing alternative to in-person gatherings, event organisers and producers say it is not financially viable.

“For many a company in our space, going virtual is simply to create some visibility and keep the brand alive. You won’t even break even,” Joy FM broadcaster and consultant George Quaye said in January when Ghana reinstated a ban on concerts and public gatherings in response to an increase in COVID-19 cases.

On 12 March, as part of ongoing COVID-19 alleviation efforts for the economy, the government announced that it would provide tax breaks to companies for quarter two to quarter four of 2021. This was revealed by Minister for Parliamentary Affairs and caretaker Finance Minister Osei Kyei-Mensah-Bonsu during the 2021 budget statement and economic policy presentation in Parliament.

“The government will provide corporate income tax rebate of 30% to companies hard hit by the COVID-19 pandemic for quarter two to quarter four of 2021,” he said. “Targeted companies include those in the accommodation and food services, education, arts and entertainment, and travel and tour operators.”

Additionally, tax stamps on income taxes for small businesses for the aforementioned period have been suspended.

The recent tax relief follows other economic recovery interventions, including grants and soft loans which were rolled out last year. For instance, the National Board for Small-Scale Industries has disbursed 37 million Ghanaian cedi (about $6.5m) to creative arts practitioners under the Coronavirus Alleviation Programme Business Support Scheme. The beneficiaries, who have now exceeded 24 000, include musicians and filmmakers, among other creatives. They were selected from 12 creative arts associations supported by the Creative Arts Agency and received between GH¢1 000 and GH¢200 000.

The tax breaks are expected to serve as an extra cushion for a struggling sector, but some stakeholders are questioning their practicality. The CEO of 3Media Networks, Sadiq Abdulai Abu, wonders how an industry that “hasn’t seen revenue going up within the last year” can truly enjoy a rebate. “Our investments have been going to waste,” he said on the Accra-based Peace 104.3 FM on Saturday. “So, if you come and promise us tax rebates, on which expected revenue will the relief be?”

For Music Pharmacy business manager Michael Marc Wood, there‘s still more the government can do. “Thirty percent isn’t enough amid the periodic curfews on most operations, which generate revenues for players along the value chain of this sector,” he told Music In Africa. “However, we essentially need a premium action-backing framework of effective policies, proper copyright legislation, substantial investment and education for this sector, which can potentially survive regardless unforeseen calamities such as COVID-19.”

The government has been also criticised for holding large public gatherings despite its own ban on social events. If government events can be held, the same could be done for the creative sector, Abu says. “It’s unfortunate that we [event organisers] are bent on adhering to the state directives and the law, but the state itself and its key actors are not doing the same.”

Meanwhile, the country, whose official active COVID-19 cases stand at about 4 000, has started distributing 600 000 doses of vaccines under the UN-backed COVAX initiative, which assists low-income countries. Despite a perceived reluctance of some citizens to be vaccinated as a result of conspiracy theories, the government aims to target about 70% of Ghana’s 30 million population before the end of the year. Even if the government achieves its goal of vaccinating 20 million citizens in the coming months, Wood doesn’t see things returning to normal for at least another year, echoing the sentiments of Charterhouse Ghana CEO Theresa Ayoade in 2020.

“The serious erosion in confidence in gathering and social distancing that we are promoting – and rightly so – to curb the spread of the virus is not working for our industry,” she said in July. “So our industry has still not picked up, and we think that it’s going to take two years for our industry to get back to where it used to be.”

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