'Govt moved economy from taxation to production' – Kwaku Kwarteng

Sat, 3 Oct 2020 Source: 3 News

The government of President Nana Addo Dankwa Akufo-Addo has shifted the local economy from taxation to production, Mr Kwaku Kwarteng, a Deputy Minister of Finance, has said.

He stated on TV3's The Key Points programme on Saturday, October 3 that this forms part of efforts to grow the economy and also to ameliorate the hardships on Ghanaians.

“The government is shifting the economy from taxation to production. I could go to the 2017 budget and list all the tax lines that we either abolished or reduced,” he said.

In 2017, the government either abolished or reduced over 15 “nuisance” taxes.

These included abolishing the 17.5% VAT/NHIL on real estates, abolishing the 17.5% VAT/NHIL on selected imported medicines, that are not produced locally, abolishing of the 17.5% VAT/NHIL on financial services, and abolishing import duty on the importation of spare parts.

The government also abolished 1% special import levy, 17.5% VAT on domestic airline tickets, levies imposed on Kayayei by local authorities, reduced import duty for all goods excluding vehicles 50% and vehicles by 30%, abolished excise duty on petroleum, provided full corporate tax deduction for private universities who plough back 100% of profits into the university, reduced National Electrification Scheme Levy from 5% to 3%, reduced Public Lighting Levy from 5% to 2%, reduced special petroleum tax rate from 17.5% to 13% and introduced specific rates

The government also replaced the 17.5 VAT/NHIL rate with a flat rate of 3 % for traders and granted Capital Gains Tax Exemption on stocks traded on the Ghana Stock Exchange or publicly held securities approved by the Securities and Exchange Commission (SEC).

Mr Kwarteng, who is also Member of Parliament for Obuasi West, said: “We did introduce the GETFund levy and the NHIL Levy.

“We did make them tax lines that for which you could not repeat as input tax . But what you need to look at is that overall the interventions that we have brought by way of taxing, did they reduce the tax burden on Ghanaians or not?”

His claims were, however, rejected by former Minister of Finance Seth Terkper, who indicated on the show that those taxes that were abolished have been reintroduced in different forms.

“They have not shifted the economy from taxation to production because each of the taxes they have gone back to use other means of reintroducing it,” he said.

On this particular point, Mr Kwrateng clarified that although the government had removed some taxes, it was also its responsibility to look at which of the taxes to be reintroduced to enable the government achieve its objectives.

“Even though in 2017 we had abolished some taxes, it is the responsibility of government as the economy moves to see which taxes will have to be reduced further, which other taxes will have to be reintroduced in order to achieve specific economic policy objectives,” he said.

Source: 3 News

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