BLUE SKY PRODUCTS (GHANA) LTD. v. COMMISSIONER OF GRA (DOMESTIC TAX)
2024
COURT OF APPEAL
GHANA
CORAM
- ERIC KYEI BAFFOUR JA (PRESIDING)
- NOVISI ARYENE JA
- STEPHEN OPPONG JA
Areas of Law
- Tax Law
- Constitutional Law
- Commercial Law
2024
COURT OF APPEAL
GHANA
CORAM
AI Generated Summary
Blue Sky Products (Ghana) Ltd. appealed against a High Court decision which upheld the Ghana Revenue Authority's tax assessment based on a 15% rate contending it should be 8%. The Court of Appeal dismissed the appeal, ruling that Free Zone Enterprises are distinct from other exporters and thus are subject to different tax regimes. The court also dismissed claims of discrimination under Article 17 of the 1992 Constitution, affirming that Blue Sky Products, having benefited from a ten-year tax holiday, must now comply with the 15% tax rate as per the Income Tax Act. The appeal was rejected in its entirety, with costs awarded against the appellant.
J U D G M E N T
NOVISI ARYENE JA:
At page 23 of the 5th edition of the book Taxation in Ghana, the learned authors Benjamin Kunbuour, Abdallah Ali-Nakyea and William Kofi Owusu Demitia made a profound statement, which shall guide us in our discourse in this appeal.
They stated thus;
"Unlike other branches of law, revenue law is purely a creation of statute, -legislation being its main source. The judicial function is therefore confined to interpretation. There is therefore no equity (legally speaking) in tax statute, and liability cannot be implied under any principle of equity but must be found in the express language of a statutory provision."
This is an appeal against the decision of the High Court Accra, dated 23rd November 2021, which decision dismissed the appeal brought by Blue Sky Products (Ghana) Ltd (hereinafter referred to as the appellant) against the Final Objection Decision of the Commissioner General of the Ghana Revenue Authority (hereinafter referred to as the respondent). The objection is in respect the interpretation of section 28(2) of the Free Zones Act 1995, (Act 504) and paragraphs 3(3) and 4 of the first schedule of the Income Tax Act, 2015 (Act 896).
Section 28(1) of the Free Zones Act 1995 (Act 504) exempts Free Zone Enterprises from payment of income tax on profits for the first ten years from the commencement of operation of business. It is the case of appellant that section 28(2) of the Act provides that after the ten year concession period, agro-processing companies engaged in export of non-traditional products, shall be assessed income tax at the rate not exceeding 8%. And that based on the Act, appellant (an agro-processing company engaged in the export of non-traditional products) self-assessed its tax liability for the half yearly period ending 30th June 2020, at £88,549.27.
However, applying the higher tax rate of 15% under paragraph 4 of the first schedule of the Income Tax Act, 2015 (Act 896), respondent assessed tax for appellant for the same period at £166,029.88.
Dissatisfied and aggrieved with the tax assessment of the respondent, by a letter dated 8th July 2020, appellant lodged an objection to the tax decision with respondent, on the following grounds:
I. That paragraph 4 of the first schedule to the Income Tax Act is inconsistent with the statutory provisions of section 28 of the Free Zones Act.
II. That as an exporter of non-traditional products, appellant is by virtue of paragraph 3(3) of the first sc