Business News of 2014-06-27

There is limit to how much tax we can pay – TUC cautions gov’t

The Trades Union Congress (TUC) is warning government that there is a limit to how much workers can bare with the increasing taxes in the country.

Government has come under severe criticism over the implementation of new tax regimes with the latest being the yet to be implemented 17.5% Value Added Tax (VAT) on some financial service.

Already, the Ministry Of Finance and Economic Planning has hinted to Citi Business News, it will introduce specific schemes to move the informal sector into tax net.

According to the Secretary General of the TUC, Kofi Asamoah, government must be innovative in expanding the tax base of the country.

“We’ve met the advisor on tax to the minister and of last we’ve realized there have been several taxes and it’s important to let everybody know that there is a limit to what we can pay. If you over tax us, you will be definitely be depriving us of our livelihood. Times are very hard,” he noted.

Government has clarified that the implementation of the new VAT charges next month does not mean a 17.5 per cent increase in the cost of banking services that attract the levy.

The 17.5% charge on some 32 financial services has generated huge public controversies, with the business community and bank customers expressing loss of confidence in banking.

According to the business community, this coupled with current economic challenges will increase their cost of production.

But a Tax Policy Advisor at the Ministry of Finance and Economic Planning (MOFEP), Dr. Larbi Siaw told Citi Business News, people have a wrong impression about the new VAT tax regime.

He said: “What I want to emphasis is that the basic individual or the consumer has been protected all through; the business community is already paying, so this is an opportunity to have the input –output set off…we can assure them that the overall impact is not 17.5%, it is less.”