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Business News of Thursday, 30 August 2018

Source: citinewsroom.com

NPP’s tax cuts cosmetic, they should apologize – Terkper

The Akufo-Addo administration owes Ghanaians an apology for its inability to provide significant tax relief, a former Finance Minister, Seth Terkper, has said.

Mr. Terkper remarked that the perspective of the New Patriotic Party (NPP) government on taxes eventually changed after it came to power.

“It [ESLA] could have been classified as the most nuisance of all taxes. Why is it being retained? Because if you fail to see the problem in opposition, you will come into government. I think what is required rather is an apology to Ghanaians; that we didn’t appreciate.”

Mr. Terkper was at the centre of the Mahama administration that was accused of burdening Ghanaians with nuisance taxes, en route to its election 2016 defeat.

The Akufo-Addo administration, when it came to power, removed about 10 of the taxes it described as nuisance taxes.

It also reviewed four other taxes downwards.

The affected taxes included included the one percent Special Import Levy, 17.5 percent VAT/NHIL on financial services, 17.5 percent VAT/NHIL on selected imported medicines that were not produced locally, import duties on raw materials and machinery for production within the context of the ECOWAS Common External Tariff (CET) Protocol and the 17.5 percent VAT/NHIL on domestic airline tickets.

But a key tax tagged as a nuisance, the Energy Sector Levy Act (ESLA) still remains, and is a vital cog in the government’s plan to handle the energy sector debts.

The government in 2017 established the Energy Sector Levy Account (ESLA) PLC; a Special Purpose Vehicle (SPV) incorporated as a public limited liability company to issue long-term bonds to resolve debts to banks, Bulk Distribution Companies (BDCs), and other energy sector related debts.

These developments, among others, have led Mr. Terkper to describe the government’s attempt to remove nuisance taxes as limp.

“Let’s not spit hairs. The substantive taxes are still in place. Most of what has been done is cosmetic,” he said on Citi TV’s The Point of View.

“Remember there was a promise to take out ESLA. ESLA as I said is generating GHc3 billion a year; GHc3.4 billion annually,” the former minister added.