A former Finance Minister, Seth Terkper has criticised the Akufo-Addo government for implementing what he considers the “worst tax system” in Ghana’s history.
He argued that the current tax regime is excessively harsh and punitive, which could lead individuals to resort to tax evasion tactics.
During an interview with Citi FM on Monday, February 5, Mr Terkper emphasised the importance of the government taking into account the heavy burden already placed on Ghanaians when formulating tax policies.
“I think we are seeing the worst of the tax system… It is the most punitive and worst tax structure that we have had. And as with every punitive tax, you will end up not collecting, or generating as much revenue as possible,” he said.
“But more importantly, when you begin to introduce punitive taxes, taxpayers find ways and means of evading and avoiding the tax. So if you have a simplified tax regime it is better and compliance increases.
“And the evidence is that if you look at our tax-to-GDP ratio well until recently as GRA is claiming, the highest point at which revenue was collected was 2015 per the percentage of GDP, not nominal terms.”
The opposition National Democratic Congress (NDC) has accused the New Patriotic Party (NPP) government of introducing over 50 new taxes since 2017.
The continuous imposition of taxes has ignited public outrage in Ghana. The latest taxes imposed on Ghanaians include the Value Added Tax (VAT) on residential electricity usage and the Emissions Levy.
In response, the Trades Union Congress (TUC) and 35 organised labour unions have announced plans to stage a demonstration on Tuesday, February 13.
This decision comes after the government refused to heed their demand to withdraw the 15 per cent Value Added Tax (VAT) imposed on electricity.
The TUC and 35 other labour unions argue that they are already overly burdened, and the introduction of this new VAT will exacerbate their financial struggles.
Source: myjoyonline.com
