Economy of Ghana: Ghanaian businesses suffering- Mahama warns against VAT hike

Ex-president Mahama has cautioned against moves to increase the VAT, saying it could cripple businesses. Former President John Mahama is w...

Ex-president Mahama has cautioned against moves to increase the VAT, saying it could cripple businesses.

Former President John Mahama is warning against plans to increase the Value Added Tax (VAT) in the mid-year review budget, saying it could have dire consequences on local businesses.

The Daily Statesman newspaper on Friday reported plans by the government to increase the VAT from 17.5 to 21.5 per cent.

READ MORE: Gov’t to increase taxes in mid-year budget

The reported also added that President Akufo-Addo is against the move but he is said to have been convinced by a strong argument by the Economic Management Team.

According to the report by the pro-government newspaper, Finance Minister Ken Ofori Atta and others were said to have made a strong case for more revenue because of a funding gab of some GHC4 billion for the rest of the year.

This includes an electricity bill of some GHC1.2 billion to power suppliers, including Karpower, Ameri and Aska. Others are GHC800 million to equip the Ghana Police Service and get more policemen and women on the streets and GHC400 million for education as access to free education will significantly increase.

There is also arrears of GHC3 billion of some GHC5.6 billion audited arrears left behind by the previous Mahama-led National Democratic Congress government, out of which about GHC560 million must be paid.

The rest of the financial commitments by the government include GHC200 million to tackle sanitation, GHC300 million to cater for school feeding and another GHC 300 million for the Nation Builders Corps programme.

Reacting to the news report, Mr Mahama said in the tweet that the Ghanaian business sector is going through difficulties and any hike in the VAT would cripple businesses further.

READ MORE: Zylofon boss to create one million jobs for youth of Kasoa

He further noted that the increase in the VAT will defeat the NPP's campaign promise of shifting the economy from "taxation to production."

 

"The Ghanaian business sector has never experienced such difficult times in the history of the 4th Republic. Akufo-Addo's proposed new taxes would cripple businesses further and also defeat his much-touted mantra of 'from taxation to production.''

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