Withdraw new taxes immediately – Minority to government
The Minority in Parliament is demanding the immediate withdrawal of new taxes introduced by government in the mid-year budget review arguing it will worsen the plight of Ghanaians.
It said the increase in the Energy Sector Levy and the Communication Service Tax (CST) or ‘Talk Tax,’ also would result in increases in the prices of food items, transportation fares and communication charges.
The Minority, who had prior to the budget presentation warned against any such increments, have criticised government for refusing to heed wise counsel.
Minority Spokesperson on Finance, Cassiel Ato Forson news conference on Tuesday said the proposed increases in taxes will disturb the finances of many households and businesses as this will compound the excruciating hardships Ghanaians are already going through.
“If these increases (petrol, diesel and LPG) create frustration and Ghanaians wish to vent through phone calls or on social media, the mid-year budget has made that expensive as well, following the imposition of a 50% increase in the Communication Service Tax from 6% to 9%”.
In his view, the increments will add on to a raft of taxes imposed by the Akufo-Addo government despite the party’s promise in opposition not to do any such thing if voted into power. Among the ‘new’ taxes Ghanaians are paying currently, Ato Forson alleges is a 5% backdoor increase in Value Added Tax (VAT) couched as National Health Insurance Levy (NHIL) and Ghana Education Trust (GETFund) Levies.
The NDC MPs are accusing government of “cosmetically” posting a positive primary balance for two consecutive years at a time when the public debt has ballooned.
Mr. Ato Forson, a former Deputy Finance Minister is projecting that based on what he describes as government’s appetite for borrowing, the public debt could reach some ¢220 billion by the end of the year, representing 65% of Gross Domestic Product (GDP).
“This would mean that in three years, President Akufo-Addo would have added GHS 100 billion to the public debt. We wish to stress that this only represents what has been added since 2017. In all, President Akufo-Addo has borrowed about ¢160 billion (not what is added to the public debt) since 2017 with part of it used for debt reprofiling”.
“The public debt would exceed the projected ¢220 billion, once draw-down begins for a number of loans approved by Parliament. This rapid increase in the public debt level means that we have reached a point of debt unsustainability, a fact confirmed by the World Bank Country Director,” he added.
For the Minority, the mid-year budget shows clearly the public finance is in a dire state and the resort to additional tax measures is an indication for what they believe are troubling times ahead.
The populist policies adopted by President Akufo-Addo, in their view, have come full cycle and are throwing all the gains made from the fiscal consolidation prior to the coming into office of the New Patriotic Party (NPP) government, out of gear.
“It has become obvious that the NPP has no intention of keeping their promises to Ghanaians when it comes to borrowing and the public debt, the imposition of taxes, fuel price adjustments and the resolution of the general hardships facing the people.
The mid-year budget presented by the Finance Minister only offers gloom and portend very difficult times for all Ghanaians. There is, therefore, the need for the Akufo-Addo government to change course or they will plunge the economy into much bigger challenges,” Ato Forson said at the news conference.