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Ghana loses approximately $1.2 billion in tax incentives offered foreign companies every year which would otherwise have been channelled into segments of the economy crying for real resuscitation, a study carried by ActionAid Ghana has established. Consequently, the study has advised the enactment of necessary legislation so that all the huge sums or money that go to cushion foreign companies operating in the country, find their way into the national kitty. ActionAid Ghana, a non�-governmental organization, in collaboration with ISODEC centre, launched the report sensitizing the media to tax justice, tax incentives and the �Tax Power Campaign,� all in a bid to encourage Ghanaians to demand proper accountability in taxes paid by companies, and also to pay the right taxes required of them. The report reiterates that Ghana loses huge sums of money in taxes that could have been used to alleviate poverty, to the tune of $1.2 billion (GHc 2.4 million) annually as a result of tax incentives to foreign and big companies operating in the country. This figure was arrived at, having taken into consideration, the GDP base between 2012 and 2014 as well as the annual tax- expenditure. The report also says that analysis of the percentage component of total revenues given as incentives in different categories, shows that in 2012, 41% of trade tax revenues were lost through tax exemptions compared to 28% of direct tax and VAT revenues. The 2013 Budget and Economic Policy Statement of the government estimates that Ghana�s tax expenditure was about 3.28 per cent of GDP. In the 2014 Budget, the figure has been readjusted to 2.1 per cent of GDP. It is therefore estimated that Ghana lost $1.2 billion as a result of tax incentives equivalent to the total health sector budget for the year The estimations also show that in the year 2012 alone, direct tax and VAT exemptions amounted to US$876 million. This is also about 67 per cent of all exemptions with trade- related exemptions making up 33 per cent of all tax exemptions in 2012. Presenting part of the report findings, Mr Bernard Anaba, a policy analyst with ISODEC, says the research shows that there has been a decline in trade revenues from 2006 to date due to tax exemptions such as import tax exemptions and tax completions among ECOWAS countries. However, he says that all this notwithstanding, Ghana�s tax rate remains the lowest in the sub- region. He adds that when Ghana gives tax incentives, �we are not able to close all the loopholes or gaps and we lose billions of dollars.� ActionAid recommends that the tax exemption gap be closed, otherwise government will be forced to impose high taxes on its people, especially the poor ones. The impact of income tax on the poor, therefore, must be a source of worry for all. ActionAid representative, Mr Anaba, said those incentives are �harmful� because the way they are granted makes some sectors of the economy suffer. He said Foreign Direct Investment (FDI) inflow inched up in Ghana due to oil exploitation from 2011,and over 79-per cent of FDIs are located in Accra and Tema. Mr Anaba called for urgent negotiations and discussion in order to provide solutions. Mr Emmanuel Budu-Addo, Head of Finance at ActionAid, says that taxation can be traced to the Egyptian taxing on households and added that even American taxation dates back to colonization. He said taxation has four fundamental purposes referred to as the 4 Rs � Revenue which stands for the income generated by the government to enable it to undertake important projects for the citizenry. Representation is the power given to the citizens through the payment of taxes to challenge the government as to how the state is governed in that by paying taxes they acquire the right to demand accountability from the government. Redistribution stands for resources. By generating income from taxes, government is able to distribute resources including water, electricity and other necessities to reach every citizen. In this case, all areas of the economy will be catered for and citizens� satisfaction will be enhanced. And, finally, re-pricing, which would encourage or discourage the acquisition and use of certain less important products such as tobacco and alcohol. He said this would help the government to address the Balance of Payment (BoP) difficulties. Mr Budu-Addo said that equity is a cardinal principle of taxation, which requires the tax burden to be proportional and based on benefits received from society. He stressed that �the equity principle is not about how much you pay but the effect on you when you pay.� He explained that tax dodging is a grey line between tax evasion and avoidance, and decried the rate at which such practices have denied the government much needed revenue to carry out development projects. He said such practices also breach the principle of equity, in which usually the poor man is always the one who suffers while the big companies rather benefit.