Former Finance Minister, Seth Terkper is warning of dire repercussions on Ghana’s economy given the reduction of taxes by the Akufo-Add led government.
According to him, the reduction will only encourage smuggling and deprive government of needed taxes for development.
His comment comes after Finance Minister, Ken Ofori-Atta while delivering the 2017 Budget in Parliament announced government's decision to abolish eight taxes and reduce four others, many of which were set by the previous government.
The taxes the Minister listed to be abolished and reduced include;
(a) Abolish one percent special import levy,
(b) Abolish 17.5 VAT on financial services
(c) Abolish 17.5% VAT on selected imported medicines
(d) Initiate steps to remove import duties on raw materials and machinery
(e) Abolish 17.5 VAT on domestic airline tickets
(f) Abolish 5% VAT on real estates
(g) Abolish excise duty on petroleum
(h) Reduce special petroleum tax rate from 17.5% to 15%
(i) Abolish duties on importation of spare parts.
(j) Abolish levies imposed on Kayayei's by local authorities
(k) Replace the 17.5 VAT on Ghana Stock Exchange (GSE) traders to a flat rate of 3.5 percent
(l) Reduce National Electrification levy
According to Mr Ofori-Atta, many of the taxes were nuisance taxes, and hence the removal will ease the difficulties imposed on Ghanaians.
But Former Finance Minister in an interview with Joy News said the tax cuts is a recipe for disaster.
He explained that tax free spare parts importation is only going to deprive Ghana of revenues.
Seth Terper urged government to weigh the pros and cons before implementing the reduction.
Source: adomonline.com
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Oh NDC. You are confused. You ain't see nothing yet.
DI..CK HEAD.HOW CAN YOU SMUGGLE SOMETHING YOU ARE NOT GONNA PAY FOR?
pls let them do what they want to do.so far they make sense to me. at least they have given us reasons to believe it can work
Really!!! why would I smuggle something I would not pay tax on when imported into the country??
The man is confused. Lets all pray for him, he is somebody's son.
Adverse effect is equally true,in that spare Parts in Ghana would be cheaper than that of our neigbores and therefore they would rather choose to buy from Ghana and the Spare parts market in Ghana would boom. Does that not make economic sense? And yet iam a lay man
What Mr Terkper is syaing in terms of smuggling might make sense if the neigboring countries had to pay more duties on sparparts in their respective countries and therefore would prefer to use the Ghana Harbors through their Ghanaian agents. But the Finance Minister is not saying they are not going to pay taxes on the sales of Quantum of values of goods they Import through Ghana borders.Of Course there will be a corraboration between customs and Income Tax. Authorities.
What Mr Terkper is syaing in terms of smuggling might make sense if the neigboring countries had to pay more duties on sparparts in their respective countries and therefore would prefer to use the Ghana Harbors through their Ghanaian agents. But the Finance Minister is not saying they are not going to pay taxes on the Quantum of values of goods they Import through Ghana borders.Of Course there will be a corraboration between customs and Income Tax Authorities.
I believe the reporter posted the wrong story. Or the reporter misquoted him. if contrary then hmmmm.
The true economist who is the son of an economist is the one to talk to us, not you Mr Seth Terkpe. Please, please leave us alone. Why will people smuggle things into the country when they have less duty to pay? Aaaaah!!