Information available to the Daily Statesman suggests that the Value Added Tax may go up to 21.5 percent from the current 17.5 percent.
President Akufo-Addo, our source told us, tasked Finance Minister Ken Ofori Atta to come back on Tuesday with other measures to raise more revenue for the government’s programme.
Next week Thursday, Mr Ofori Atta is expected to present the government’s mid-year budget review to Parliament.
Some economists believe there is the need for a tax rise to help the government raise the required revenue to fund its ambitious programmes.
They have passed a vote of confidence in the programmes of the Akufo-Addo government which they say hold the prospects of improving on the lives of the people and the economy in general if the required funding is raised to sustain their implementation.
Aggressive tax policy
Among those who have sent proposals to the Finance Minister is Eric Osei-Assibey, a senior lecturer at the Depart of Economics, University of Ghana, who believes the only way for the government to create fiscal space is to pursue a much more aggressive tax policy measures.
Dr. Osei-Assibey admits that the Ministry of Finance has scored high points with regards to tax administration policies. He, however, explains that such measures take time to bring in significant additional revenues that are sustainable.
We are building a nation together
Dr. Osei-Assibey said in an interview with the Daily Statesman that even though payment of taxes would never be a pleasant duty for any citizen, “we must all be prepared to meet that civic obligation.”
“We are in this business of nation building together; it’s not the only government who has the responsibility. Citizens must be prepared to pay to fund our development agenda. That is the only way the government can generate money to fix the bad roads, tackle the poor conditions in our hospitals and more importantly fund the bold social intervention programmes like the free SHS,” he stressed.
Touching on his proposal for an increase in VAT to fund the free SHS programme, Dr. Osei-Assibey said he expects Ghanaians not to see this an as an additional burden.
“The fact of the matter is if we were made to continue paying for the education of our wards at the SHS level, the burden on households would be far greater than paying just a little to keep it free for all. If we can all come together and set aside one cedi for our children to go to school free, I think we can’t get anything better than this. It’s just like the case of the National Health Insurance Scheme,” he stated.
He added: “I think if this is well explained to the people, they should readily embrace it.”
Others tax proposals
Other proposals from Dr Osei-Assibey include digitising the tax payment system in the informal sector by deploying mobile money tax payment system to increase efficiency in tax collection and compliance; making property tax payment compulsory for all property owners and deploying a number of the Nation Builders Corpse workers to move from building to building to collect these taxes. To make this work, he wants a special court to be set up in all districts to prosecute defaulting property owners to serve as a deterrent to others.
Others are a reduction in the VAT threshold to broaden the tax net and intensifying the stamp tax collection from micro and small enterprises to close the tax gap in the informal sector.
Source: Daily Stateman Newspaper