Concerns that the government is burdening businesses with excessive taxes, according to Finance Minister Ken Ofori-Atta, are unfounded.
“I believe most of us do not pay taxes,” he claims.
He explained that because Ghana’s current revenue-to-GDP ratio is only 13% when it should be 20%, “a third of taxes that should be paid are not being paid.”
“There was a company that was reporting 342,000 cedis of sales a month and paying 40,000 cedis in VAT,” he said, citing an example from the implementation of the e-VAT system. After the system was implemented, monthly sales were 158 million and VAT was 19.8 million. So you start to see that some of these employees who are being over-audited by GRA are clearly not doing their jobs.”
The finance minister stated on the sidelines of the IMF spring conference in Washington DC that the introduction of new tax measures is not intended to burden the corporate sector unduly.
He added that the tax increases are justified by the current economic circumstances and the country’s need to increase income mobilization following its exclusion from the international capital market.
He is optimistic, though, that when the country’s economy improves, some of these taxes will be eliminated, allowing for additional growth and expansion.
“So once you start putting all of these appropriate taxes in place, you certainly get into a period where you actually – as we came in 2016, you remember in 2017 we cancelled a lot of taxes – as we start to build up, certain taxes may not be necessary, but we need the revenue now to be able to move in that direction.”
“I believe that digitalization will help, and that as we approach 18-20% revenue to GDP, it will ease.” Because we have a market-oriented philosophy for our government, we will always look for ways to make our businesses pay as little tax as possible to ensure employment and expansion, but there are times when we need to generate appropriate taxes to fund the budget,” he said.
Original Story on: myjoyonline.com
