Economist Criticises Ofori-Atta For Maintaining Taxes Killing Businesses: “We Need Them To Save Economy”

Economist Criticises Ofori-Atta For Maintaining Taxes Killing Businesses: “We Need Them To Save Economy”

  • An economist with the Africa-China Centre for Policy & Advisory has bemoaned the maintenance of some taxes burdening Ghanaians
  • The government did not make any downward reviews or remove any taxes during the mid-year budget review
  • The economist, Paul Frimpong said the taxes are stifling economic growth because of their effect on businesses

The government has been criticised for not listening to the plea of businesses to ease the tax burden on them.

Paul Frimpong, a Development Economist with the Africa-China Centre for Policy & Advisory, told that tax relief for businesses was one of his hopes for the mid-year budget review.

Economist Slams Ofori-Atta
Finance minister Ken Ofori-Atta and his deputy, Abena Osei-Asare. Source: Getty Images
Source: Getty Images

But the finance minister, while not adding any new taxes, did not remove or review any tax rates downward.

The Importers and Exporters Association, for example, bemoaned excessive taxes charged at the ports.

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Given the struggles of the economy, Frimpong argued some of the existing taxes remained counterproductive.

Already, the government has had to review economic growth targets downward from 2.8% to 1.5%.

"When you look at some of the taxes that the government of Ghana uses to revamp revenue, some of them are very counterproductive, like the COVID-19 levy. What exactly are we using the COVID-19 levy for?”
“That [the non-removal of taxes] is not very exciting and that really puts businesses in a very tight corner. We need businesses to be doing well to be thriving to turn around the economy of the country.”

Concerns with e-levy

Frimpong, however, noted that the underperformance of e-levy revenue was a major concern.

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According to the budget review, the government raised only GH¢455,579,224 out of the projected GH¢982,849,212 representing 46.35%.

“It is a big deal because the e-levy has become one of the government’s go-too revenue sources for managing the economy and you track and see that some of the government’s expenditure is actually linked to the projected revenue from the e-levy.”

Most recent tax measures reported in April 2023 that the government introduced three new tax bills in a bid to boost revenue mobilisation.

Parliament has passed the Excise Duty Amendment Bill 2022, the Growth and Sustainability Levy Bill, 2022, the Ghana Revenue Authority Bill 2022 and the Income Tax Amendment Bill 2022.

The new taxes formed part of the government's bid to facilitate the Board Approval for the $3 billion International Monetary Fund (IMF) Programme staff-level agreement.

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