Sunday, 17 November 2019

Gov’t introduces new taxes – Economist


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Adnan Adams Mohammed

An economist has disclaimed Finance Minister, Ken Ofori-Atta’s statement that the government is not introducing new taxes in 2020 fiscal year as captured in the budget statement.

The minister’s statement is not true, as there are moves to extend levies which were meant to expire in 2019, Professor John Gatsi has said.

“We will take a radical policy and institutional reforms toward raising our tax-to-GDP ratio over the medium-term from under 13 per cent currently to around 20 per cent. The focus will be on efficiency and base-broadening rather than imposing new taxes on our people and businesses. This way, we can raise our domestic contribution to our ambitious transformation agenda, in line with the Ghana Beyond Aid vision,” Mr Ofori-Atta said during the presentation of the budget to Parliament, last week.

“The government’s intention to seek approval to have the National Fiscal Stabilisation Levy (NFSL) and Special Import Levy (SIL) extended for another five years from 2020 to 2025, constitutes an introduction of new levies”, the renowned economist and the Dean of the School of Business at the University of Cape Coast (UCC) has said.  

The two special levies, NFSL and the SIL, were introduced in 2013 to raise funds to stabilise the economy, which was negatively impacted by external conditions. Even though they were due to end in 2017, the New Patriotic Party (NPP) the government sought parliamentary approval and extended them to 2019. 

However, Mr Ofori-Atta wants an additional five-year implementation of those levies to shore up the government’s revenue.

The “government shall renew and extend the National Fiscal Stabilisation Levy and Special Import Levies (SIL) for five years (5) to support the budget,” the Finance Minister stated last week when he presented the 2020 budget in Parliament.

Professor Gatsi speaking on the budget statement in an interview explained that: “It is very clear from Article 174 of the Constitution that all levies, charges and taxes are to be approved by Parliament; so long as you are calling on Parliament to approve an extension of a tax or a levy which should have ended last year or this year, it is an introduction of a new tax because Parliament has a duty to approve it to come to being, therefore, it is re-introduction of a tax or a levy”.

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