The Honorary Vice President of the IMANI Centre for Policy and Education, Bright Simons has expressed a deep sense of regret, especially over the limited influence of think tanks like IMANI in shaping public discourse and media coverage ahead of the 2024 general elections.
In his statement, Bright Simons lamented that the clinical analysis conducted by IMANI through its IMANIfesto project, which assessed the manifestos of Ghana’s major political parties, did not generate the level of public conversation it deserved.
The think tank’s work, which Bright Simon noted dissected policy proposals with a global perspective, was aimed at elevating the national discussion to more substantive levels. However, the lack of attention from media and public stakeholders to these vital analyses is a source of disappointment for Bright Simons.
“I believe that voters need, at least, a taste of this rich stuff. Let me give an example. One of the seemingly revolutionary ideas in the NPP’s manifesto is the idea of a ‘flat tax’ for SMEs and individuals.
“The benefits claimed for a flat tax include simplification of the tax code, so that compliance would be less burdensome, which; predictability of tax liabilities so businesses can plan; and easier comparability and, hence, transparency.
Bright Simons, Honorary Vice President of IMANI Centre for Policy and Education
With just four days left before Ghana’s general elections, Bright Simons strongly criticised the ruling New Patriotic Party’s proposed flat tax policy, casting doubt over the feasibility of the proposed policy.
He pointed out that IMANI’s research challenges the purported benefits of a flat tax, particularly for Ghana’s unique tax challenges.
Bright Simons asserted that the proposal is fundamentally disconnected from the real complexities of the country’s tax system. He argued that the problem facing SMEs and individuals in Ghana is not the calculation of tax rates but the intricate, often opaque, rules surrounding exemptions, deferrals, rebates, and allowable deductions.
A flat tax, Bright Simons asserted, would not simplify any of these aspects, which are far more burdensome for businesses than the tax rates themselves.
“Let me illustrate this with the Beiersdorf Ghana case study. Beiersdorf, the owner of the Nivea brand, chose Ghana as one of just 4 sub-Saharan countries to base a full office, complete with supply chain and marketing functions. It had big dreams for this market. From sourcing shea butter to experimenting with new product ranges, Ghana seemed like the place to be.
“Then Beiersdorf found itself in a fight with the Ghanaian tax authorities. The Ghanaian entity had a license agreement with the German HQ in respect of which brand right payments had to sent to Germany.”
Bright Simons, Honorary Vice President of IMANI Centre for Policy and Education
Bright Simons noted that the protracted dispute with the Ghanaian tax authorities over the classification of payments for intellectual property and technology transfer fees quickly turned this opportunity into a challenge.
He emphasized that the Ghana Revenue Authority insisted that Beiersdorf’s payments for its license agreement with its German headquarters should be treated as technology transfer fees, thus subjecting them to a different tax regime.
According to him, after years of legal battles, a Ghanaian court ruled in favor of the tax authorities, citing a clause in the license agreement that mentioned the transfer of marketing know-how.
The court’s decision, Bright Simons noted required Beiersdorf to register the agreement with the Ghana Investment Promotion Centre (GIPC) as a technology transfer agreement to comply with local regulations.
The IMANI’s Honorary Vice President further pointed out that the long-standing dispute and the lack of clarity in the tax code ultimately contributed to Beiersdorf’s decision to scale back operations in Ghana.
He disclosed that in 2023, the company shut down its local offices, laid off numerous skilled managers, and scrapped millions of dollars in planned investment. This example, Bright Simons argued, illustrates the failure of a flat tax to address the root problems in Ghana’s tax system.
According to Simons, the focus on flattening tax rates is misplaced when the real issue lies in the complexity of the tax code itself, emphasizing that the flat tax while appealing in its simplicity, does little to tackle the bureaucratic hurdles that businesses like Beiersdorf face.
He also stressed that the flat tax policy does not address the need for clearer rules on tax exemptions, deductions, and other critical elements of compliance.
As the country prepares to go to the polls, Simons called for a more informed electorate—one that is equipped with the knowledge to critically assess campaign promises and the feasibility of proposed policies.
He warned that without engaging with the deeper issues of tax reform and economic policy, the electorate risks supporting superficial solutions that fail to address the country’s systemic challenges.
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