Presenting the 2017 budget statement to Parliament on Thursday, Mr Ofori-Atta said as part of measures to improve the business environment through tax exemptions, government would abolish the 17.5 per cent VAT/NHIL on domestic airline tickets.

Domestic airlines protested when the 17.5 per VAT/NHIL on domestic air travel was approved by Parliament in December 2013. The increase has since been transferred to the cost of tickets which has affected domestic air travel.

Government, according to the minister, would also begin preparatory work for the establishment of an Airport Free Zone (AFZ) in the country, in 2017.

He said airports all over the world were becoming increasingly multimodal, multi-functional enterprises that created opportunities for commercial developments in areas where they were located.

“Available evidence suggests that airports tend to attract investment and, therefore, generate jobs. Many countries are considering airport cities, or aerotropolis (airport-centred urban economic regions) as a vital means of expanding opportunities and creating jobs,” he said.

He said the establishment of sector-targeted Free Zones would be a major driver for capital inflows and jobs for Ghanaians.

The preparatory work for attracting private investment into the Airport Free Zone (AFZ) will begin this year and will be a purely private sector investment with government only facilitating the process.

“Government will explore several options with potential investors,” he said and that preparatory work for the AFZ is expected to be completed by the end of this fiscal year.