An Economist, Joe Jackson has disclosed that the deluge of taxes proposed by government in the 2021 budget presentation will affect the “poor harder”. He explained that this will more telling as this category of people are the major purchasers of consumables.
He said that taxes and levies applied will appreciably affect their personal economies.
“When you impose a consumption tax, it hits the poor harder than it hits the rich. Because as a percentage of my income, fuel does not constitute that importance. But when you go down the bottom of the ladder, transportation to work and back is a major headache. Every cedi increase causes you [the poor] more trouble. And it affects everything and everybody– the cost of food, the cost of drinks, everything”.
Mr. Jackson singled out the proposed 30 pesewas increment of fuel prices. This, he asserts will affect the price of goods and services. He however, called for the alternative practice of targeting the rich with such taxes.
“They [government] should tax wealth and not VAT”.
Petroleum taxes unjustifiable
Dr. Charles Wereko-Brobby has earlier disclosed that the petroleum tax proposed by government is unjustifiable.
He said the sector has become an easy avenue for the government to rake in money.
“It is totally unjustified… There is no justification. It [petroleum products] just happens to be a low-hanging fruit that you can just slap anything on”.
Mr. Wireko Brobbey also noted that special taxes for specific purposes should be scrapped to offer petroleum customers some relief.
“20 years ago, President Kufuor introduced what he called the Refinery Recovery levy. That was supposed to last for four years. But 20 years on, it is still here, now as the energy sector recovery levy. In 2015, oil prices collapsed and Mahama government instead of reducing prices according to the formula said our revenues are down because the datum prices of oil have gone down, so we need to crawl back revenue. So there was a 2-year special petroleum levy. I think 8 years on, it is still on. I will suggest that if these two temporary taxes which were meant to address specific issues were removed, that alone will reduce taxes”.
Wireko Brobbey
COVID-19 blamed for poor economic performance
Meanwhile, Minority leader, Haruna Iddrisu, has bludgeoned President Akufo-Addo’s government for excessively borrowing to stabilize the country.
Touching on Ghana’s current debt stock at GHS291.6 billion as of January 2021, he highlighted the consequence on the borrowing.
According to him, the government cannot solely blame the COVID-19 for its poor management of the economy.
“The record is that President Akufo-Addo has increased our debt stock from GHS120 billion to GHS291 billion representing some 76% of debt to GDP. He chose conveniently to blame COVID-19 for the poor performance of the economy, and yet he is seeking to recover from COVID-19”.
Haruna Iddrisu
Govt’s “silence” on taxation in the 2020 Mid-year budget is worrying – Joe Jackson
