Presentation on the Venture Capital Fund Operator to Members of the Ghana Institute of Taxation and the Institute of Banks.

Introduction
Venture Capital Fund Operator
A Venture Capital Trust Fund was set up by an Act of Parliament, Act 680 in December 2004 and became operative in December 2005, the aim of the Trust Fund is to provide financial resources for the promotions of venture capital for small and medium scale enterprises in the economy and also to stimulate the emergence of a sustainable private owned venture capital industry in Ghana.

The Bank
A bank is a financial institution that generally accepts deposits and makes loans.

Tax Concessions
Venture Capital Operator:
Private investors including individuals who operate a venture capital fund or firm have the following tax incentives:

• Upfront relief from duty in each year on subscription for new equity shares in venture capital funds
• Full tax exemption from corporate income tax, dividend tax, and capital gains for 5 years.
• Losses from disposal of the shares during the tax-exempt period may be carried forward to the post-exempt period up to five years
• Financial institutions which invest in venture capital subsidiaries, will receive a chargeable income tax deduction equal to 100% of their investment.
• Full deduction of investment in a venture capital entity.

The Bank:
The bank, unlike the Venture Capital operator, has no specialized tax concessions. It is subject to tax on all incomes or profits made and has no tax holidays.
Significantly, rural banks enjoy a 10-year tax holiday and attract corporate tax of 8% after the holiday period.
Income derived on loans advanced to the agric sector or for leasing operations attracts tax at 20% instead of the normal 25% suffered in the mainstream taxation.

These tax concessions do not equitably compare favourably with the concessions granted to the Venture Capital Operators.