Finance Minister Ken Ofori-Atta has said majority of Ghanaians fail to pay taxes as he defends tax policies of the Akufo-Addo’s administration
The finance minister made these remarks when speaking on the sideline of the IMF spring meeting in Washington DC following concerns that Akufo-Addo’s administration is killing businesses with excess taxes.
I believe most of us do not pay taxes, He said in defense of excessive tax policies unleashed on business in spite of the outburst of anger from businesses.
Ken Ofori-Atta explained that Ghana’s current revenue to GDP ratio estimated at 20% is only 13% , thus leakages in the payment of taxes.
A third of taxes that should be paid are not being paid, he mentioned.
There was a company that was reporting 342,000 cedis of sales a month and paying 40,000 cedis in VAT. After the system was put in place, sales were 158 million a month and VAT was 19.8 million. So you begin to understand some of these people that GRA is over-auditing them clearly are not doing what they’re supposed to do, he added.
Trade union executives have bemoaned what they call undue taxation of government which has already rendered businesses unprofitable with recent introduction of the three new tax instruments by government
Excise Duty Amendment Bill 2022, the Growth and Sustainability Levy Bill, 2022, and the Income Tax Amendment Bill 2022 are the three new tax instruments that were recently added on April 17, 2023.
The Finance Minister explained that the tax instruments have become imperative in this harsh economic situation, he however expressed optimism in the near future where some of the taxes will be abolished after stabilizing the economy.
So once you begin to get all of these appropriate taxes in place, certainly you then get into a period where you actually – as we came in 2016, you remember in 2017 we cancelled a lot of taxes – as we begin to build up then certain taxes may not be necessary, but we need the revenue now to be able to move in that direction.
I believe that the digitalization will help, and as we move towards 18-20% revenue to GDP it will ease. Because we as a market oriented philosophy for our government, we will always look for ways in which we will make our businesses pay as little taxes as possible to ensure that employment and expansion comes into place, but there are periods in which we need to generate appropriate taxes so that we can fund the budget,” he said.
