Tax cuts not the solution – Ken Thompson

The Chief Executive Officer of Dalex Finance and Leasing Company Limited, Kenneth Kwamina Thompson, has asked the Nana Akufo-Addo led administration to go beyond just scrapping taxes and rather come up with the policies and programmes that will allow the private sector to thrive.

“I don’t think businesses collapse because of the taxes; businesses collapse because there is no business. The issue is that government will have to find a way to expand the tax net,’’ he said.

According to Mr. Thompson, the private sector only needs an enabling environment expand and create much-needed jobs.

“Taking off taxes in itself will not achieve much. It must be accompanied by policies and programs to get the private sector to invest into the productive sectors of the economy,” he told the B&FT.

“Nobody needs money from the government and nobody creates wealth when you can’t protect that wealth. When people put their money into ventures and they lose it is not because they did something wrong but because of bad policies; it’s annoying.”

Mr. Thompson also urged the government to create incentives for people to put their money into agriculture, which will go a long way to revive the economy.

Vice President Dr. Mahamudu Bawumia, in opposition, criticised the National Democratic Congress (NDC) government’s tax policy, promising that an NPP government will scrap these taxes when voted into government.

According to Dr. Bawumia at the time, “an NPP government will build the most business friendly and most people friendly economy in Africa. This means that job creation will be at the heart of economic policy. A lot of the other taxes we are seeing today will be scrapped”.

Some of the taxes that are expected to be scrapped include the special import levy, 17.5% VAT on imported medicines, real estate sales, financial services and domestic airline tickets.

The Nana Akufo-Addo government has also given strong indication it will reduce the corporate tax rate from 25% to 20% and to also reduce the 17.5% VAT for SMEs to a 3percent flat rate.