Parliament is the place to be today and the Minority caucus is the group to watch in the House, as the Members of Parliament (MP) after last Friday’s disappointment from the constitutional body to use its oversight responsibility to force the President, Nana Akufo-Addo, to cut down the size of his government.
The House is expected to debate and pass three new revenue bills for the government to rake in GHS 4 billion per year to build financial muscle to fix the ailing economy and secure a board approval for a bailout from the International Monetary Fund (IMF).
The bills have been labeled “killer taxes” as it is envisaged they will collapse businesses and spark a wave of mass unemployment in the country.
Ahead of today’s decision on the bills, including the Excise Tax Stamp and Excise Duty amendment bills, Income Tax amendment bill and Growth and Sustainability levy bill, The Herald has picked up reports that the Minority caucus is going to pull another surprise. They are expected to overwhelmingly reject the tax bills.
Unlike the Ministerial and Supreme Court nominees, where the National Executives of the opposition National Democratic Congress (NDC), publicly issued a directive to its 130 plus MPs to reject, but not all of them did, the party has decided not to issue any press statement on this matter, but has left matters to the Minority leadership to handle.
The Herald is informed that, the caucus will not do a secret ballot this time, but resort to headcounts so as to know who would go against the party’s position. It will also show those who will absent themselves from the House on a crucial day like today.
The Majority side of the House doesn’t appear to have a numerical advantage now, following the loss of one of its members, Philip Basoa, the Member of Parliament for the Kumawu Constituency, Ashanti Region.
Already, the bills are rejected by some business groups, including the Ghana Union Traders Association (GUTA) and the Association of Ghana Industries (AGI) among others. They have asked Parliament not to pass these “killer taxes; bills because business risks collapsing as a result”.
GUTA President, Dr Joseph Obeng, has called on Parliament not to pass the government’s proposed three new taxes arguing that businesses may not be able to thrive if Parliament passes these new taxes.
Opposing the proposed taxes, he said, “We are sending a clear message that unless they [Parliament] represent themselves and that they do not represent the good people of Ghana, especially the business community, then they should go ahead with this. All that we are saying is that they should hold on.
“Let’s evaluate and see where best we can enhance revenue, rather than compound [taxes] on all of us. They [Parliament] should do the needful because it’s not going to help us. Already businesses are dying, and the government wants to ensure local productivity. How do you ensure local productivity when we have these killer taxes?”
Tax Consultant, Dr Abdallah Ali Nakyea, has slammed the government for the continuous introduction of taxes, stating that instead of widening the tax net, the government is rather deepening the tax net on already overburdened taxpayers.
In his view, the new taxes will negatively affect the operations of businesses, which could lead to job losses and seriously impact the economy.
“Remember if in every case you introduce a levy then very soon, there will be a levy on everything, including the air we breathe. Covid came, and we introduced a Covid recovery levy of 1 percent because we are prepared to help the government resolve the crisis. Then we have the financial sector stabilisation levy, and we are paying, so if you are even bringing a new levy, a lot of existing levies need to be repealed,” Dr Ali Nakyea told Bernard Avle on the Citi Breakfast Show on Thursday, March 30.
Dr Nakyea added “when you cannot pass on the cost, you absorb it, that is why another segment of GUTA is saying, if you don’t listen, and you bring it on board, we are not going to absorb it. And when you cannot pass it onto the price, you pass it backwards, which means you cut down on employment, you cut down on input which means you downsize and that will hit the economy backwards because unemployment will have to increase.”
However, in response to these concerns, Information Minister, Kojo Oppong Nkrumah, has stated that the government is willing to consider input aimed at amending the bills in the interests of policymakers and the business community.
“We have to contextualize the pushbacks. It is commendable that all of these groups are raising their specific challenges with these three revenue bills. I think that we must encourage them to come with these specifics and perhaps what amendments they want to see done to make it more bearable”, he said on the Point of View on Citi TV.
“At the end of the day, we have to get something as a Republic that allows us to move forward in this enterprise and see what both sides can accommodate. So that in the end, we can find some sensible middle ground that allows us to pass these three revenue bills which have already committed to the initial economic program for 2023 and close these gaps we have and go forward to conclude both the external creditors assurances and the Fund program itself as quickly as possible”, Kojo Oppong Nkrumah added.
Kojo Oppong Nkrumah, is concerned that if these bills are not passed, plans to raise money to supplement domestic revenue will be thwarted.
“If we don’t do what we have to do for the country, we will have major challenges. So, this is a set of measures we must ensure is worth passing. This is a major bridge we have to cross in closing this revenue gap and ensure that there is more liquidity”, he stressed.
Kojo Oppong Nkrumah, acknowledged that Ghana is currently in a challenging situation.
He warned of much more difficult times to come if the government’s efforts to close the domestic revenue gap continue to stall.
“We are not in a good place, because we don’t have access to the international capital market. Having hard currency to service our import obligations is significantly being threatened.”
President Akufo-Addo and Finance Minister, Ken Ofori-Atta, promised Ghana will get the IMF programme by the end of March. This was followed by the Governor of the Bank of Ghana, Dr Ernest Addison’s call at a news conference in Parliament to pass the taxes laws before the end of April for the IMF Executive Board to consider Ghana for support.
“The official creditors met last week, they are looking at a date in April, by which time they expect to give the necessary financial assurances. And once that is out of the way, once we have signed this Memorandum of Understanding (MoU), once Parliament has passed these new revenue measures, we would have completed what they call the prior action”.
Dr Addision added, “this is what is needed for the fund to set a date for the executive board meeting. So hopefully if things go as planned, by the end of April, we should see that executive board meeting taking place”.
He thus urged Parliament to prioritise the passage of the three new taxes before it.
