Business News of Tuesday, 27 November 2018
Source: Myjoyonline.com
2018-11-27
Former Finance Minister, Seth Terkper
Former Finance Minister, Seth Terkper reproved current government policies that he believes have left the economy reeling.
There are several factors the government of Ghana cannot control – like ballooning crude oil prices and a strengthened U.S. dollar, Terkper cited. But taxes, he said, have swelled to new extremes.
“The VAT has had a bad impact,” he told Joy News’ Raymond Acquah on a panel discussion analyzing NPP’s performance after nearly two years in power.
While experts wrongly predicted that the VAT would rise, the tax was “restructured.” As it stands, the VAT rate is at 12.5% and has been separated from the 2.5% National Health Levy that used to be combined. VAT is charged on all taxable suppliers and imports in addition to a 3% flat rate for small companies.
Terker explained that the way taxes have been increased has affected many of Ghana’s working-class, specifically in the service sector, who already work for paltry wages.
You cannot affect the woman selling on the side of the road,” he admonished. “Impacting the service sector negatively impacts the economy,” he added.
During Finance Minister Ken Ofori-Atta’s 2019 budget presentation, he announced that under Akufo-Addo’s administration, the 17.5 percent VAT/NHIL has been abolished on domestic airline tickets, financial services and selected imported medicines.
Finance Minister Ken Ofori-Atta during the 2019 budget presentation
But taxes have popped up in other sectors. In August, Akufo-Addo indirectly told a congregation that he planned to tax churches.
A month before, during Ofori-Atta’s mid-year review, he introduced a new luxury vehicle tax, a fee for car owners with engine capacities of 3.0 litres and higher.
“The difficult truth is that, once you get into the wealth and prosperity sphere, you necessarily slip into the tax and accounting language,” Akufo-Addo said in August.
Per the NPP’s manifesto, “a strong economy is defined by its stability, its growth rate, the levels and number of taxes, the extent of value-addition, the creation of wealth, and the prosperity of citizens.
Despite Terker’s tax concerns though, he appears optimistic about the trajectory of Ghana’s economy concluding that “we are on the right track.”
He refused to answer when asked how he would score the economy on a scale from one to 10. “If you’re asking me to score the government, that means you’re asking me to score myself,” he joked.