Financial analyst, Sydney Casley Hayford has described the current National Democratic Congress (NDC) administration as the most unfriendly to the business community.
According to him the introduction of the 17.5 percent Value Added Tax (VAT) and National Health Insurance Levy (NHIL) by the Ghana Revenue Authority (GRA) on the non-core banking services are unreasonable and ridiculous.
”This is the most business unfriendly government I have ever had to be alive to witness in this country; this is so bad. Whoever it is who conceived or brought this up and thought they were doing government a service has really just blundered completely and they have blundered with the assistance of the Central Bank,” he said.
Speaking on Citi FM‘s political news analysis programme, The Big Issue on Saturday, Mr. Casley Hayford noted, the Central Bank is supposed to be the custodian of ensuring that the economy of this country is buoyant.
He questioned why he would be charged for a cheque book and also pay VAT on the same cheque book. “How can you charge me for giving me a cheque book; you want me to pay VAT on the amount that the bank charges as fees for work that it is normally supposed to provide!” he added.
Casley-Hayford revealed that he will go to court to challenge the idea of why a goods and services tax is being hidden as a value added tax. “We are going to go and challenge the whole idea of what actually a value added tax means and this is not value added tax; you do not add value to me by charging me more.”
The GRA on Friday released a list of 32 fee-based services by the banks that would attract tax from July 1, 2014.
The amendment of the VAT law last November expanded the scope of the tax and raised the rate from 15 percent (including the National Health Insurance Levy) to 17.5 percent.
Some Ghanaians have raised concerns about the rationale behind the 17.5 percent Value Added Tax (VAT) and National Health Insurance Levy (NHIL) the Ghana Revenue Authority (GRA) seeks to charge on the non-core banking services.
Another panelist on ‘The Big Issue’, Editor of Business Finder, Toma Amihere said the move by the GRA also defeats Bank Of Ghana’s efforts to achieve a cashless economy.
Franklin Cudjoe, founding President and Chief Executive Officer of IMANI Ghana said the 17.5 percent VAT on the noncore banking services does not encourage people to bank.
”What is the purpose of this, because clearly you are not encouraging people to go and do banking, you are not even encouraging technology…There is a policy disconnect,” he said.
Mr. Cudjoe suggested that the law has to be reviewed. ”I am not saying you shouldn’t charge but I think you can do it nicely; there are some services that obviously you want to impose certain taxes on. Do we even know the quantum of resources that would be generated as a result of these rules…?
”I do not see why we need newer taxes; it is not as if there is even any real growth within the banking sector to add value to my money… you get peanuts for long term investments and savings,” he added.