The Ghana Federation of Labours (GFL) has called on Parliament to engage critical industry stakeholders prior to any action on the new taxes and excise bill that are yet to be approved.
According to the Federation, the country is facing a financial crisis which has caused a high cost of living for the citizens, thus the need for Parliament to take careful consideration in passing the bills.
The GFL stated that it had earlier issued a petition to the Speaker of Parliament, Alban Bagbin, on February 3, in which his attention was drawn to the amount of taxes being paid by “distressed businesses,” and the harm a possible increment in taxes will pose on investments.
Contained in a statement issued, March 30, 2023, the Ghana Federation of Labours also expressed disappointment in Parliament for approving President Akufo-Addo’s six ministerial appointees. It explained that Parliament by constitutional mandate is expected to check and avoid the implementation of policies that threaten businesses.
“Parliament by constitutional mandate is positioned to check profligacy of the Executive to ensure good governance for the benefit of the citizenry for development. Contrary to expectations of the people, Parliament is seen as being complicit in implementation of outrageous Government policies which threaten to destroy businesses and render joblessness.”
Ghana Federation of Labours
New taxes to have negative impact on businesses
Meanwhile, tax Consultant, Dr Abdallah Ali Nakyea, has slammed the government for the continuous introduction of taxes. He indicated that instead of widening the tax net, the government is rather deepening the tax net on already overburdened taxpayers.
Dr Nakyea highlighted that the new taxes will negatively affect the operations of businesses which could lead to job losses and seriously impact the economy.
“Remember if in every case you introduce a levy, then very soon there will be a levy on everything including the air we breathe. Covid came, and we introduced a Covid recovery levy of 1 percent because we are prepared to help the government resolve the crisis. Then, we have the financial sector stabilization levy, and we are paying. So, if you are even bringing a new levy, a lot of existing levies need to be repealed.”
Dr Ali Nakyea
The tax consultant, siding with GUTA on the need for government not to introduce the tax, further stated that when one cannot pass on the cost to consumers, then he must absorb it and that is why another segment of GUTA is saying that if government doesn’t rescind on its decision, the Union is also not going to absorb it.
“And when you cannot pass it onto the price, you pass it backwards, which means you cut down on employment, you cut down on input which means you downsize and that will hit the economy backwards, because unemployment will have to increase.”
Dr Ali Nakyea
The three new taxes are currently before Parliament for consideration to help government shore up more revenue to salvage the ailing economy. The three new taxes include Income Tax (Amendment) Bill, Excise Duty and Excise Tax Stamp (Amendment) Bills and the Growth and Sustainability Levy Bill.
The taxes, according to the government, will help raise about GHC4 billion to help close the fiscal gap and also help the government meet the requirement of the International Monetary Fund to qualify for the bailout.
Currently, institutions such the Importers and Exporters Association and the Ghana Traders Association of Ghana (GUTA) have expressed their reservation about the new tax bill.
Dr Joseph Obeng, President of GUTA, has urged Parliament not to pass the government’s proposed three new taxes. He explained that businesses may not be able to thrive if Parliament passes these new taxes.
“Let’s evaluate and see where best we can enhance revenue, rather than compound [taxes] on all of us. They [Parliament] should do the needful because it’s not going to help us. Already, businesses are dying, and the government wants to ensure local productivity. How do you ensure local productivity when we have these killer taxes?”
Dr Joseph Obeng
