Abstract
Three problems were identified in this study. The first aspect of the problem is that Ghana’s housing market is not affordable for many lower-income Ghanaians, in contravention of the Government of Ghana’s goal of creating a more affordable housing market. The second aspect of the problem is that it is not known whether the Government of Ghana’s corporate income tax incentive for low-cost housing developers has been successful in raising income for developers. The third aspect of the problem is that Regimanuel Gray (Ghana) Ltd. does not yet have a sound empirical basis on which to weigh low-cost versus non-low-cost housing projects in its portfolio. The objective of the study was to determine whether tax incentives at Regimanuel Gray (Ghana) Ltd. were positively associated with company income. It was found that there was a) a statistically significant (p < 0.01) difference between mean income associated with low-income housing (M = $12,567,370, SD = 1,324,085) and mean income associated with non-low-income housing (M = $139,639,000, SD = 6,095,264) and b) a statistically significant (p < 0.01) difference between mean ROI associated with low-income housing (M = 1.415, SD = 0.1721062) and mean ROI associated with non-low-income housing (M = 15.948, SD = 1.226073). The contribution of the study was thus to discover that it is economically inefficient for Regimanuel Gray to engage in low-cost housing projects under the current tax break scheme. The main recommendations emerging this analysis are that a) Regimanuel Gray ought to dedicate more of its productive resources to non-low-cost housing and b) Regimanuel Gray ought to press the government harder for more tax incentives to build low-cost housing.
Highlights
Tax revenue, from organizations as well as from individuals, is an essential component of Ghana’s gross domestic product (GDP)
The purpose of the project is to determine whether tax incentives at Regimanuel Gray (Ghana) Ltd. are positively associated with company income
The ramification for Regimanuel Gray is that prevalent pressure should be placed on the government in order to bring the profitability of low-cost housing projects closer to the profitability of non-low-cost housing projects, or Regimanuel Gray has no real incentive to remain profoundly involved in such projects
Summary
From organizations as well as from individuals, is an essential component of Ghana’s gross domestic product (GDP). From 1990 onwards, Ghana has obtained between roughly 10% and 21% of its GDP from taxes ([1] World Bank, 2014). Corporate taxation remains an indispensable constituent of Ghana’s tax revenue. According to World Bank data, 30.6% of all Ghanaian businesses identified the national corporate income tax rate of 25% as being a protracted encumbrance on business success. This sky-scraping comparable of business chagrin with corporate income tax exists despite the fact that Ghana prune the corporate income tax rate from 35% in 1998 to 32.5% in 2000 and again to 25% in 2006, where the rate has remained ever since (World Bank, 2014)
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