2% of VAT to fund political parties ?

Accra, Jan 28, GNA - Professor Kofi Kumado, Director of Legon Centre for International Affairs (LECIA), on Monday proposed that two per cent of Value Added Tax (VAT) should be set aside to support political party activities.

"I am not proposing an increment in the existing VAT rate, but at the current rate we could set aside two per cent to fund political parties," he said.

Prof. Kumado made the proposal at a day's workshop on the proposed Political Parties Bill, 2007 and the proposed Public Funding of Political Parties Bill, 2007, organized by the Institute of Economic Affairs (IEA).

The workshop was to give members of the Parliamentary Select Committees on Finance and of Constitutional, Legal and Parliamentary Affairs and to leaders of the four political parties with representation in Parliament the opportunity to review and make input into the two bills before they are finalized.

The proposed Political Parties Bill was a result of the review of the existing one. The review was done by the Former Speaker of Parliament, Mr. Peter Ala Adjetey while the proposed State Funding for Political Parties Bill was drafted by Professor Kofi Kumado, under the auspices of the IEA.

Prof. Kumado noted that there was a legal justification for state funding of political parties, saying that to the extent that the existing law placed obligations, which had grave financial implications on political parties, for the state should fund political party activities.

He said the law required political parties to file annual reports including financial statements to the Electoral Commission (EC) on their activities, adding that the parties are also required to have offices in all regions and in two-thirds of districts.

Prof. Kumado suggested that besides two per cent of VAT, donations to Parliament from foreign bodies should all be put in the political parties' fund.

He said support for political parties should focus on the two areas of administration and elections, and that equal amounts to be determined by the EC and the Inter-Party Advisory Committee (IPAC) should be given to all registered parties for administration.

However, funding of elections should be in the form of re-imbursement, based on the accounts submitted by each party after presidential and parliamentary elections. He suggested that at least 10 per cent of the funds should be set aside and dedicated solely towards encouraging women to participate in politics, saying that only parties with at least 30 women in Parliament should benefit from that special fund.

"The rest of the money could be invested by the EC in consultation with the IPAC to generate profit to fund political parties, especially during elections," he said.

Prof. Kumado said it was his hope that the bill would be placed before Parliament only after the 2008 Elections, to allow time for the fund to grow and "to ensure that all the necessary nitty-gritty was ironed out for a level playing field." He pointed out that the intention of the bill was however not to fully meet the expenses of all political parties in the country, but to provide basic support as a way of consolidating the country's growing democracy.

Mr Enoch T. Mensah, MP, Ningo-Prampram and Vice Chairman, National Democratic Congress (NDC) said Parliament welcomed the proposal. "There are several examples around the world in places like Afghanistan, South Africa, Zimbabwe and other places where political parties are partially funded - there is no reason why we cannot do the same in Ghana. "In fact if we get it going it will only expand political parties' presence at the grassroots level and deepen participatory democracy," he said. 28 Jan 08