Imposition of new taxes: Timing was wrong – NDC MPs

Members of Parliament (MPs) from the National Democratic Congress (NDC) have faulted the Akufo-Addo-led government for being insensitive to the already suffering Ghanaians by imposing eight new taxes on them with the excuse that they are aimed at recovering the economy which is bearing the brunt of the novel coronavirus (COVID-19).

According to the NDC MPs, the effects of COVID-19 on individuals, small and medium scale enterprises (SMEs) and large businesses are dire, noting that government ought to have increased stimulus packages for these businesses and individuals rather than imposing new taxes.

The 2021 Budget statement and economic policy of the government read on the floor of Parliament on March 12, 2021, on behalf of President Akufo-Addo by the Majority Leader and Minister of Parliamentary Affairs, Osei Kyei-Mensah-Bonsu, introduced ten new tax policy proposals, saying it was the best way to go as far as the recovery of the Ghanaian economy is concerned.

Included in the new tax regime are increase in the National Health Insurance Levy by one percentage point from 2.5% to 3.5%, increase in VAT flat rate by one percentage point from 3% to 4%, introduction of Energy Sector Recovery Levy of 20 pesewas per litre of petrol/diesel, introduction of financial sector clean-up levy of 5% on profit-before-tax of banks and introduction of sanitation and pollution levy (SPL) of 10 pesewas per litre of petrol/diesel.

Furthermore, the introduction of COVID-19 Health Levy, Betting and Gaming Levy and the review of road tolls.

Addressing a press conference to state their official position on the 2021 Budget and Economic Policy Statement of the government, the Minority Leader, Hon. Haruna Iddrisu, who read a statement on behalf of the Minority Caucus, said they find the timing for the imposition of the taxes and levies problematic and unjustified.

“We need a recovery post COVID to improve the performance of the economy, improve livelihoods and create new opportunities for jobs to address unemployment. We also recommend increases in stimulus for businesses – hospitality, pharmaceuticals among others.

The imposition of eight new taxes and levies by the Akufo Addo government are unjustifiable because;

At a time when the private sector is struggling to stay on its feet following the negative impact of COVID-19, President Akufo-Addo and Vice President Mahamudu Bawumia have imposed taxes that are likely to distort and impede investment decisions. Again, at a time when Ghanaians are experiencing hardship due to the already harsh economic situation imposed on them by the Nana Addo-Bawumia Government, this Government is proposing to introduce further draconian and harsh taxes that will ultimately increase the prices of goods and services and thereby exacerbate the hardship the ordinary Ghanaian is already facing”, noted the Minority Leader.

He added “Already this Government has increased prices of petroleum products by over 11 percent since the beginning of the year. It is therefore unconscionable to attempt to impose additional levies on fuel prices at this critical moment. The Akufo-Addo-Bawumia Government has once again demonstrated that it is not only insensitive to the plight of Ghanaians but has also run out of ideas in the management of the Ghanaian economy. Even more disturbing is the fact that Parliament recently approved a 20 pesewas per litre on fuel and another 8 pesewas on LPG to cater for energy sector related payments. It therefore comes as a shock, the latest attempt to increase yet again the prices of petroleum products at the pump for the same reason”.

Commenting further, the NDC MPs said the actions of government clearly demonstrates that it is oblivious of the plight of the ordinary Ghanaian.

“It is absurd and hypocritical for a government that prosecuted its election campaign on the pledge of moving from taxation to production, make such a dramatic “U” turn and introduce so many draconian taxes in such a short space of time”, Hon. Iddrisu posited.

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