Government has proposed new taxes in its 2021 Budget
The 2021 Budget Statement introduced new taxes and adjusted upward some existing ones much to the chagrin of Ghanaians, especially business owners whose operations have been highly affected by the coronavirus pandemic.
New taxes that have been proposed by the government include levies to tackle sanitation and pollution as well as gaming. The National Health Insurance Levy and the VAT Flat Rate have been upped by one-percent with an upward review to the road tolls as well.
There is also a five percent levy on banks’ profit before tax to make up for costs incurred during the government’s cleansing of the nation’s financial sector which, according to the Ghana Association of Bankers, will be counterproductive.
According to the government, the new taxes will cushion the struggling economy as well as recover the cost of freebies that were offered to Ghanaians during the pandemic-induced restrictions and partial lockdown.
Some economists have indicated that the new taxes were not properly timed because the financial situations of business are not too well due to COVID-19 whilst others hold that increasing levies and taxes on the same sect of businesses every now and then was a lazy approach to taxation.
These are sound arguments to make considering the fact that the vast majority of eligible taxpayers have not be captured by the tax net.
We are aware that government’s aggressive digitisation drive has been aimed at formalising the informal economy and suffice to say that significant impact has been made in this regard.
The tax identification number, digital addressing system, and other interventions all seek to capture relevant data about both formal and informal businesses for the purpose of taxation.
It is therefore disturbing for the government to overtax businesses that operate in selected sectors of the economy whilst the vast majority of informal businesses continue to have a field day.
The harm of the viral pandemic has been far-reaching and the repercussions and efforts to claw back what has been lost must be borne by all and not just a few.
This is the time to broaden the tax basket leveraging the gains of digitisation and not overburden the compliant few.
- Maximise revenue potentials and minimize non-discretionary expenditure – Government told
- Ghana to issue US$1 billion sustainable bonds in July – Adu Boahen
- These are the five bills Ghana’s 8th Parliament will consider as it resumes after recess
- Ghana’s economy has never been in good shape under Akufo-Addo’s government – Sosu
- Ghana’s debt-to-GDP for 2020 was 78% not 76.1% - IMF reveals
- Read all related articles
