The Executive Director of the Centre for Policy Studies (CPS), Dr. Adu Owusu Sarkodie, has cautioned the government against offering tax rebates simply because firms run two or three shifts.
The economist argues that such an incentive system is misguided and risks draining public revenue without guaranteeing real productivity or job creation.
As part of the 24-Hour Economy initiative, the government has proposed a policy that promises 25% and 50% corporate tax rebates for companies that operate two-shift and three-shift systems.
This move is meant to encourage around-the-clock production. But according to Dr. Sarkodie, the idea, while well-intentioned, misses the point of effective fiscal targeting.
In an event to review the initiative, he admitted that the 24-hour initiative has good intentions to stimulate goods production, employment, and productivity. However, the shift pattern should not determine who gets tax subsidies.
He explained that merely working longer hours does not guarantee higher output or efficiency, especially when many businesses still struggle with unreliable power, low worker morale, and obsolete machinery.
Fiscal incentives are supposed to catalyze growth, not become loopholes. Dr. Sarkodie warned that without clear benchmarks tied to productivity, employment outcomes, and sectoral impact, the current proposal could open the door to abuse and inefficiency.
“If you are saying that you are going to grant corporate income tax rebates of 25% and 50% to firms operating two or three shift systems, respectively, we are of the view that the shift pattern alone does not constitute a sufficient basis for determining eligibility for tax subsidies,” he indicated.
He recommended that “the incentive design should be based on productivity, employment outcomes, and sectoral impact to ensure fiscal efficiency and policy coherence. There must be a targeted tax incentive to catalyse developmental priorities.”
Experts have long cautioned that Ghana’s tax exemptions and rebates already cost the state billions of cedis annually in lost revenue. Adding a blanket incentive tied merely to working hours, he said, could worsen fiscal leakages, depriving the government of resources needed for infrastructure, education, and health.
“The incentives must be targeted, especially when you are talking about giving incentives to just the SHIFT system, companies practising the SHIFT system. We believe that is not enough. And this would reduce waste, reduce the revenue leakages, attract credible private sector participation, and get value for money,” the executive director of CPS recommended.
He praised the 24-Hour Economy Secretariat for what he called “a good job done halfway,” but urged policymakers to complete the other half by ensuring the incentive framework is results-oriented and fiscally sustainable.
