But More To Come This Week
This week promises to be another difficult one for most Ghanaian importers, as the Finance Minister, Ken Ofori-Atta, readies to slap them with lots of taxes, including increment in Value Added Tax (VAT) in the Mid-Year Budget Review on Thursday, July 19.
The Herald is informed most Ghanaian importers, especially the expatriates are closing down their companies and relocating to the country’s western neighbor, Cote d’Ivoire, where tax conditions are more favourable to their business.
Complaints have also come from the ports, especially Tema, with people saying business has been slow, and that it is not clear whether the Ghana Revenue Authority (GRA) will be able to meet its target this year.
This paper learnt that the importers, instead of bringing their shipload of goods to Ghana, rather berth at Cote d’Ivoire and transport their wares by road to Ghana, and this is affecting the volume of commodities.
Wholesalers of rice, sugar and frozen foods, including chicken, fish and others, who spoke to The Herald lamented how the importers are unable to meet their demands as a result of the high import duties.
They also revealed regular increment in the prices affecting their profit margins. Vehicle spare parts dealers at the Abossey Okai and electric cable sellers, have in the past complained about the increment by the Akufo-Addo government and how it is affecting their businesses.
It is unclear, what plan government has for the Suame Magazine, an industrialized area in Kumasi with an estimated 200,000 workers involved in metal engineering and vehicle repairs in the Ashanti Region.
It is also unclear, if the Importers and Exporters Association of Ghana (GEPA) and the Ghana Union of Traders Association (GUTA) and Association of Ghana Industries (AGI) have made inputs in the Mid-Year Budget Review.
Some retailers also disclosed how the importers try to satisfy their clients by rationing their suppliers, because their wares are not enough to meet the quantities being demanded.
Ahead of Thursday’s Mid Year Budget Review, Gabby Asare Otchere-Darko, had been on a mind game with Ghanaians, asking whether they will be ready to pay more taxes for the government to give them certain things.
President Nana Akufo-Addo’s nephew posted on his facebook wall Thursday July 12, asking “Will you support 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 family”.
His post has received lots of comments with many saying he was working on peoples mind to prepare them for an increment in VAT and other taxes.
Gabby’s newspaper, The Daily Statesman, which has various times been owned by President Nana Akufo-Addo and Finance Minister, Ken Ofori-Atta on Friday, July 13 announced published that “VAT May Go Up from 17.5% to 21.5%”.
The publication claimed that President Akufo-Addo, was embroiled in a fight over whether or not to increase VAT. It said, while the economic management team wanted taxes increased, President Akufo-Addo, was against the increment saying Ghanaians were going to be burdened with more hardship.
But this has been described as a clever attempt to make the president look good in the eyes of Ghanaians so that any backlash from the increment, will not be directed at him, especially when he is readying himself to contest the 2020 Presidential election at age 76.
Meanwhile, people continue to make references to Page 17 of the New Patriotic Party’s 2016 Manifesto, which had promised “Shifting the Focus of Economic Management from Taxation to Production”
It had said that “The mismanagement of the economy under the Mahama-led NDC government has resulted in an increase in taxes on virtually everything taxable. This has increased the burden on the private sector and has become a disincentive for production. To address these challenges, the NPP will shift the focus of economic policy away from taxation to production by” providing the following:
- Reducing the corporate tax rate from 25% to 20%
- Removing import duties on raw materials and machinery for production within the context of the ECOWAS Common External Tariff (CET) Protocol.
iii. Abolishing the Special Import Levy
- Abolishing the 17.5% VAT on imported medicines not produced in the country
- Abolishing the 17.5% VAT on Financial Services
- Abolishing the 5% VAT on Real Estate sales
vii. Abolishing the 17.5% VAT on domestic airline tickets
viii. Reducing VAT for micro and small enterprises from the current 17.5% to the 3% Flat Rate VAT introduced by the Kufuor-led NPP government
- Introducing tax credits and other incentives for businesses that hire young graduates from tertiary institutions, and
x. Reviewing withholding taxes imposed on various sectors (including the mining sector) that have constrained the liquidity of many businesses…