Tax Increment Must Come With Better Accountability – Professor Quartey

An economist with the University of Ghana, Professor Peter Quartey, has said any possible increase in taxes should be accompanied with improved accountability from the Akufo-Addo administration.

Speaking on Eyewitness News, Prof. Quartey said a marginal increase in taxes would be in order only if it were well-intentioned.

“I propose a marginal increment, but they have to communicate to Ghanaians about how they have used the resources in the past and how they hope to use the increments if need be.”

“I can support any marginal increment that will ensure that we enhance production and we enhance our health system but any increment just for increment’s sake is not the best,” he said.

Also, he said such a marginal increase has to accompanied by strategies to plug revenue leaks and also improve tax collection.

“Also, we need to have some efficient way of collecting the money. We have a lot of leakages in our system so. It should go hand and hand with an efficient collection system,” the economist said.

Return to taxation?
The Akufo-Addo administration’s resolve to move away from taxation is expected to be tested during the presentation of the Mid-Year Budget Review on Thursday.

Ahead of the reading, there have been suggestions that there may be an increase in Value Added Tax (VAT) and National Health Insurance Levy (NHIL), in the Mid-Year Budget Review.

This was after a report by a pro-government newspaper, The New Statesman, suggested that government may announce an increase in the VAT and the National Insurance Levy in the Mid-Year Budget Review.

The report suggested that VAT and NHIL may be increased from 17.5 percent to 21.5 percent.

But the government has tried to allay such fears .

The MP for Ledzokuku, Dr. Bernard Okoe Boye assured that the government would not increase the existing VAT rate

He said the government is only devising measures of raising revenue in a manner that will not negatively affect businesses and individuals.

“There will not be any VAT increase. What is happening is that government is contemplating very innovative ways of raising revenue in a manner that will be least destructive to business and bring as minimal discomfort to citizens.”

A Deputy Minister of Information Kojo Oppong Nkrumah was also hopeful that Ghanaians would rally behind any plans to raise more revenue to fund its projects.

“Moving forward, if it becomes necessary, and it is becoming necessary that we raise more revenue to ensure that we complete what remains of the agenda, I think it is an argument that the people of Ghana, as adduced from evidence, will rally behind when it is eventually rolled out.”

Dangerous times ahead
However the Minority in Parliament only sees tough times ahead for Ghanaians,

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

Cassiel Ato Forson, the Ranking Member on the Finance Committee of Parliament

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.”