The institute of Economic Affairs (IEA) has expressed worry over the introduction of taxes during the mid-year budget review by the Finance Minister on July, 29 2019.
According to the Director of Research for IEA, government could have been innovative in introducing new measures for revenue generation as the increment will worsen the burden of taxpaying Ghanaians.
Speaking at a press conference on the 2019 supplementary budget and mid-year economic review, Dr. John K. Kwakye said “we are not happy about the fact that the finance minister introduced more taxes on consumers. We think that he should have been more innovative introducing new measures rather than imposing more taxes on consumers”.
He added that “the decision to increase some taxes is unfortunate giving the additional burden the increases will impose on already overburdened tax payers rather than increasing the taxes we were expecting the Finance Minister to introduce new initiative to raise revenue.”
Dr. John K. Kwakye added that government should have rather increased tax on the profit-making banking mining and Telcos Company instead of taxing consumers.
“Beyond this revenue losses that needs to be prevented the Minister could have considered other tax initiatives; he could have considered taxing bank profit to help pay for the cost of the banking sector clean up giving the interconnectedness within the banking sector with its potential contagion effects, a case could be made for all banks to contribute to the resolution of the crisis. I would have imposed a banking sector stabilization levy of 10% on the profits of all banks after all the banks are making huge profits.”
“The mining sector is the most booming sector in the economy, this means that more income is accrued in the sector than any other and it follows that is where the minister should be looking for more revenue. I would have introduced a 5% percent tax on the profits of the mining sector to help raise more revenue” He suggested.
He also raised concerns about the finance minister’s silence in regards to tax exemption bill as the country loses over 5 billion Ghana annually over tax exemption.
“We were surprised that the minster kept silent about the tax the bill the question is; is the silence due to lack of political will to pass the bill or is it because the beneficiaries of the exemption include parliamentarians themselves and other so-called government privileged persons”.
The institute called on government to re-examine some of government’s policy such as free SHS to determine how cost could be reduced.