Ken Ofori-Atta, the Minister for Finance, yesterday dogged the Minority Caucus in Parliament as he deflated wild claims of a looming increment in Value Added Tax (VAT).
According to him, there are no plans by the Nana Akufo-Addo-led government to raise the country’s VAT which currently stands at 12.5 to 21 percent.
Ofori-Atta specifically chided the NDC for relying on social media for economic directives.
There has been widespread discussion by political parties, businesses and civil society organisations, about the possible increase of VAT because of a recent Facebook post by Mr. Gabby Asare Otchere-Darko, nephew to President Nana Akufo-Addo.
Mr. Otchere-Darko’s post read; “Will you support a VAT increase to keep your lights on, your secondary schools filled, your school kids fed, your streets clean, your streets safe, young graduates employed, and decent, affordable homes built for working families”?
The Minority in Parliament and the main opposition National Democratic Congress (NDC) took issue with the government over the facebook post by Gabby and vowed to fight any tax increase.
However presenting the mid-year budget review statement before parliament on Thursday, Mr. Ofori-Atta said: “I’ll like to advise my friends to stop taking policy directive on economic policies from social media”.
He then announced that: “Mr Speaker, there will be no increase in VAT”.
The Finance Minister said “Last year we abolished numerous taxes. The scale of tax reductions has never been implemented in the 60 years of Ghana’s economic history. The evidence shows that the economy has responded positively. What is clear to us is that we are not collecting as much as we should. The solution to this problem is not necessarily the imposition of many taxes.”
Improve Tax Performance
As part of efforts to improve revenue performance he said government would intensify tax compliance and plug existing revenue leakages.
According to him, investigations undertaken by government shows inbound leakages on goods arriving in the country, significant outstanding tax debts, suspend regimes in the area of warehousing transitory and free zones, and tax audit issues such as limited coverage, low audited productivity and low audit yields
“We are rolling out major initiatives to address this tax compliance issue. This initiative includes prosecution of tax invaders and corrupt tax officials and special VAT attack force to ensure enforcement and deepen VAT penetration from the current loan levels of 11% and institutionalize reforms of the Ghana Revenue Authority,” he disclosed.
By: Emmanuel Yeboah Britwum