The Ghana Union of Traders Association (GUTA) has called on government to put a halt to tax impositions on businesses, as these businesses are already burdened with high taxes.
According to the union, the Government in 2017, realizing the importance of lessening the tax burden on businesses, removed what were deemed to be nuisance taxes. However, it noted that as of now, these “nuisance taxes” are creeping back in various forms and folds, seriously suffocating businesses in the country to death.
GUTA explained that what is more worrying is that these taxes are being piled on a few recognizable business companies and individual business entities. It further noted that some of these taxes have rippling and cascading effects on businesses, especially SMEs, thereby militating against their growth and survival.
“Business Community in the country has done its best in terms of tax payment. Against all odds and the challenges in 2022, the government was able to exceed its revenue target. Therefore, if the government wants to increase its revenue base, the best way is to adopt innovative means to capture those businesses outside the tax net, review policies on tax exemptions, warehousing, free zones etc. to curtail the abuses, as well as prune down expenditure.”
Ghana Union of Traders Association
Contained in a statement, GUTA revealed that the continuous attribution of the economic challenges of the country to the global phenomena of COVID-19 pandemic and the Russia-Ukraine War can no longer be “overstressed” because the pandemic is now a new normal, with no end in sight for the Russia-Ukraine war. The union noted that besides that, businesses are the worst affected by the phenomena and deserve sympathy from the government.
GUTA highlighted that as inflation rate reduces, it expected that the monetary policy rate too will come down, but unfortunately, that is not the case.
“It is important to state that, currently, doing business in Ghana is extremely costly and suffocating. This makes us irrelevant in the scheme of affairs in the African Continental Free Trade Area (AfCFTA), as well as cross-border trade within our sub-regional bloc.”
Ghana Union of Traders Association
GUTA fears collapse of businesses amidst tax impositions
Furthermore, the union expressed that its worst fear is that, if care is not taken to reduce the unbearable tax burden on businesses, it will collapse businesses, increase poverty, and create insecurity in the country.
“On this note, we wish to appeal to our Honorable Members of Parliament to, as a matter of urgency carefully and properly analyze this issue of taxes and do the needful to save this country from crisis.”
Ghana Union of Traders Association
The union’s statement followed Bank of Ghana’s increment of the Monetary Policy Rate to 29.5 percent, by 150 basis points(bps), citing the need to anchor inflation expectations towards the medium-term target of 8±2 percent.
Cumulatively, the MPC has hiked the policy rate by 1500bps on concerns to moderate liquidity in the system in order to underpin macroeconomic adjustments taking place to drive inflation on a downward path.
This move by the MPC is an indication that the Committee will remain resolute in its tightening stance until inflation shows more significant signs of moderation, as it implements other available monetary tools to control the money supply and rein in inflation, despite the recent moderation of inflation.
In a press briefing following the meeting of the Monetary Policy Committee, Bank of Ghana Governor, Dr. Ernest Addison, discussed the various factors contributing to the decision.
Dr. Addison noted that headline inflation had declined marginally for two consecutive months but remained relatively high compared to the medium-term target of 8±2 percent. As such, a further tuning of the monetary policy stance was necessary to reinforce the pace of disinflation and place the economy firmly on the path of stability.
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