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General News of Tuesday, 25 October 2016


Mahama won't increase taxes if re-elected - Omane Boamah

Communications minister Dr. Omane Boamah has reiterated government's promise not to increase taxes if re-elected.

Omane Boamah said instead of increasing taxes, government will seek new ways to widen the tax net to bring in new tax-payers.

"You realise that in this manifesto we haven't spoken of increasing any tax," he said on Joy FM's Super Morning Show Tuesday and stressed government has a realistic plan to keep this promise.

The government has been criticised by leaders of the opposition NPP, mainly former Deputy Governor of the Bank of Ghana Dr. Mahamudu Bawumia who is NPP Vice-Presidential candidate. He criticised government after it announced in 2015 that it was introducing new taxes placed on condoms, cutlasses and savings.

Government after public outcry in 2016 had to backtrack on plans to introduce 1% withholding tax imposed on interest earned on individual investments.

But announcing a change of strategy, Dr. Omane Boamah laid down the plan not to raise taxes. He explained it will be based on job creation, electronic means of widening the tax net and keeping a net freeze on public sector employment. Explaining the net freeze, he said government will only employ as replacement for a retiring and resigning staff in the public sector.

This will be strictly complied with in all public sector jobs except health and education where government expects to recruit new medical professionals and teachers, the minister said.

Omane Boamah explained that this means once the wage bill is controlled, it will not consume as much as 49.2% of the tax revenue it currently does. Even better, government plans to slash the wage bill to 35% of tax revenue so there is less pressure on public finances from payroll demands.

He also stressed, government is improving the efficiency in tax collection. "We have considerably automated systems [of the Ghana Revenue Authority]," he said.

He indicated that the Registrar-General's Department which registers businesses in Ghana is being linked to the Ghana Revenue Authority so it can identify new businesses to collect taxes.

"Just by these efficiencies alone....electronically you are reaching a wider scope," he assured.

A prominent feature in the plan to keep taxes is public and private sector job creation. He referred to the new University of Ghana hospital, the Greater Accra regional hospital and other hospitals in the Ashanti region will need new intake of medical professionals.

"If more hospitals are coming up it means there are opportunities for job creation," Omane Boamah said and more jobs means more taxes for government.

He said the private sector, for example, will be key to the development of an integrated aluminium industry which can generate several jobs.