Industry stakeholders are applying pressure to the newly appointed Minister of Finance, Dr. Mohammed Amin-Adam, urging the removal of what they deem as burdensome taxes from the national tax framework.
These stakeholders argue that the upcoming Mid-Year Budget Review, slated for presentation to Parliament in the coming months, presents an opportunity to eliminate taxes such as the Electronic Levy (E-Levy), taxes on electricity consumption, and emission taxes, among others.
Moreover, the proliferation of port charges is significantly impacting importers’ finances, hindering their ability to compete cost-effectively and fully capitalize on the advantages of the African Continental Free Trade Area (AfCTA).
This action, according to them, would not only showcase Vice President Dr. Mahamudu Bawumia’s commitment, as he recently acknowledged the problematic nature of certain taxes in the country’s tax system, but also align with President Nana Addo Dankwa Akufo-Addo’s recent decision to replace his Finance Minister, Ken Ofori-Atta, along with several other ministers.
While numerous ministers were reassigned, the spotlight has predominantly been on Ofori-Atta, whom many hold responsible for the current economic challenges and high levels of national debt. Critics argue that his administration exacerbated the situation by imposing additional taxes in an effort to bridge the revenue deficit.
AGI
Dr. Humphrey Kwesi Ayim Darke, the President of the Association of Ghana Industries (AGI), emphasized that Dr. Amin Adam should align the tax proposals outlined by presidential candidate Dr. Mahamudu Bawumia in his vision statement with tangible actions during the forthcoming Mid-Year Budget Review.
He underscored the importance for Dr. Amin Adam to illustrate the government’s plan to eliminate the E-levy and implement a flat-rate tax system while he holds office.
“We should contextualise this; the vision of the presidential candidate is out; they have changed the Minister of Finance; now let’s see how that reflects in the Mid-Year Budget and in their manifesto, so we should be pushing for how these can be synchronised in their manifesto,” he told the Graphic Business in an interview in Accra on the expectations of AGI of the new Finance Minister.
Engagement
He said his outfit expected the new minister to engage the association to discuss the issue of taxes on industry and how it could be mitigated to ensure their growth and survival.
“His appointment is good. He comes with fresh thinking, fresh perspectives which I believe should be in tandem with that of the current leader of the party, Dr Bawumia,” he stated.
Reflecting more on the Mid-Year Budget Review and the vision of the Vice President, Dr Ayim-Darke expressed the hope that Dr Bawumia’s vision will be reflected, adding that the strategy of the government going forward must align with the Vice-President’s vision.
Dr Bawumia in his address to the nation a fortnight ago announced plans to abolish the E-levy, Emissions tax and other levies as part of a broader tax reform aimed at boosting government revenue and fostering a cashless society if he is elected President.
Expressing concern over significant revenue losses estimated at $24 billion or 13 per cent of GDP due to many individuals and businesses operating outside the tax system, Dr Bawumia outlined his reform agenda, which includes abolishing taxes such as the emissions tax and tax on betting to streamline the tax regime and enhance revenue generation.
“The current tax system, in place since independence, has proven ineffective.” Dr Bawumia admitted in his vision statement which many consider rhetorical.
AGI expectations
Dr Ayim Darke said with Mr Ofori Atta out, Dr Bawumia through the new Finance Minister who is said to be his choice for the position when he becomes President, has the opportunity to now remove the nuisance taxes negatively affecting the members of AGI and other members of society.
“Dr Bawumia should start demonstrating the viability of some of his vision for the country. He should start cutting down on expenditures, and where he believes that he can synchronise and increase domestic revenue, he should start demonstrating it, by rationalising and ensuring the removal of the taxes he promised to do away with if voted as president,” he said, adding that, now is the time to do so through Dr Amin Adam.
Taxes
Dr Ayim Darke told the Graphic Business that taxes were now the big issue and would be the centrepiece of this year’s election.
He charged the presidential candidates of the two major political parties in the country to evaluate how taxes were affecting the competitiveness of factories in the country and proffer solutions to ensure the sustainability of their businesses.