Home Politics MINORITY FLAYS GOV’T …Over VAT Increment Proposals

MINORITY FLAYS GOV’T …Over VAT Increment Proposals

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The Minority in Parliament has described the  Akufo-Addo led administration, as an insensitive government over suggestions that VAT and NHIL may be increased from 17.5 percent to 21.5 percent.

The Minority noted that the government’s plan to introduce new taxes and increase existing ones is unacceptable.

Minority Spokesperson on Finance, Cassiel Ato Forson predicted that the Finance Minister, Ken Ofori Atta would on Thursday announce a barrage of new taxes and reintroduce some old taxes scrapped in the 2017 budget, in his mid-year budget review.

Speaking at the Minority Mid-year budget roundtable, Cassiel Ato Forson said the economy is heading towards dangerous times.

“There have been strong indications from persons close to this government that the Finance Minister will slap a hefty 2.5 percentage increase on VAT. If this proves to be true, it would be most baffling as, apart from the extreme hardship it will impose on Ghanaians, it makes the Free SHS justification untenable without tax increases.”

“At this point, we wish to remind Ghanaians that the 2.5% VAT proceeds that accrues to the Ghana Infrastructure and Investment Fund (GIIF) has already been committed to finance that programme, as part of the 2017 and 2018 budget. This is another clear example of also channelling non-oil revenues into consumption, away from investment. A clear fact that emerges from the discussion so far is that the current crisis confronting the managers of the economy, compelling them to impose a raft of heavy taxes on the already burdened populace, is self-imposed. The Akufo-Addo government should be wary of burdening Ghanaians in its desperation to “save face,” Mr. Forson said.

The Minority also indicated that “contrary to a promise not to borrow, the Akufo Addo government is borrowing at break-neck speed and in alarming proportions.”

Some individuals, including former President John Dramani Mahama, have  raised concerns over the rumored increment, arguing that the new taxes would cripple businesses further and also defeat President Nana Addo’s much-touted mantra of “from taxation to production.

Tax Analyst with Ali Nakyea and Associates, William Demitia has already warned that any attempt to increase VAT and the NHIL could lead to an increment of prices of basic amenities.

According to him, NHIL and VAT are consumption-based taxes that affect almost all items sold in the market.

He explained further that “unless the government says that the supply of water is exempt from VAT, then we are going to pay more for even water.”

But CEO of the Ghana Investment Promotion Center, Yofi Grant has urged Ghanaians to embrace any increase in taxes since the government will provide social interventions to cushion them.

“Everybody needs to pay tax; we should get that mindset. The lower the tax, the happier we are, but there is a bigger structural anomaly in that which is that there is a small proportion of the business population paying the larger proportion of the tax,” he explained.

Meanwhile a Deputy Minister of Information, Kojo Oppong Nkrumah is hopeful Ghanaians will rally behind any plans put in place by the government to raise more revenue to fund its projects.

 

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