Review Taxes To Reflect NDC Manifesto - AFAG
The Alliance for Accountable Governance (AFAG), a political and civil society organisation, has called on the government to review downwards taxes introduced in the 2010 budget to reflect the NDC’s manifesto pledges.
“Failure to do so, AFAG will have no choice but explore all democratic means available to resist the harsh economic conditions created by the increment,” it said.
The Spokesperson for AFAG, Mr Sammy Awuku, in a statement read at a press conference in Accra, described the taxes that were introduced in the 2010 budget and passed by Parliament last Tuesday as a means of milking the ordinary Ghanaian to fund profligate government spending.
According to him, the taxes were also in sharp contrast with the NDC’s manifesto pledge to review taxes to make life easier and encourage increased employment.
Mr Awuku mentioned some of the taxes increased in the budget as: rice, 500 per cent; sugar, 500 per cent; canned tomatoes, 500 per cent; beer, 120 per cent; maize, 500 per cent and commercial motor vehicles, 150 per cent.
He said under the new tax regime, local chop bar operators would pay GHҐ500 per annum, while taxes on Akpeteshi, a local gin, had been raised by 40 per cent.
According to Mr Awuku, the hikes in taxes would increase unemployment, raise the already high cost of production and limit the capacity of businesses to expand and increase employment.
When asked whether he did not support the government’s move to increase tariffs on imported agricultural produce as a means of encouraging local production, he said the price hikes should have been done gradually till the time local farmers were in a position to produce enough to feed the nation.
He explained that as the increases were, the prices of such produce would go up and erode the purchasing power of the Ghanaian.
Mr Awuku noted that the hikes in taxes would again culminate in the high cost of production, leading to the weakening of financial intermediation and cause a high default rate by borrowers.
“In a year that most economies of the world are beginning to show signs of economic resurgence from global economic crisis, Ghana is busy grasping itself with economic recession.
In contrast, the financial turmoil which imperilled the world’s economy is documented as having reached its peak in 2008,” he added.
He said what was expected of the government was increased spending and decreased taxes, adding, “It is the same wisdom that the previous government used to grow the economy to 7.3 per cent during the heat of the crisis in 2008.”
Mr Awuku described as ironic the fact that in a year in which international market prices of Ghana’s cocoa and gold had gone up, with crude oil price pegged at $75 per barrel, the economy was being managed to choke Ghanaians.
He also called on the President to ensure that his Economic Management Team and the Finance Minister overhauled their economic management plans extensively and were “willing to spend and not to take five per cent tax off crude oil and levy by far such outrageous taxes on consumables”.
He reminded the government of the anti-public spending nature of IMF policies and said that was the reason the Kufuor administration weaned itself off the Bretton Woods institutions.
Mr Awuku said AFAG strongly believed that the long-standing association of some gurus in the President’s economic management team with the IMF and the World Bank explained why their focus was on IMF stabilisation policies.
He said IMF stabilisation programmes usually included an independent petroleum regulatory authority, full financial recovery plan for oil, gas and electricity, a cut in public expenditure and a freeze on public sector employment.