Professor Lord Mensah questions viability of vice president's tax incentives for businesses

Economist and Senior Lecturer at the University of Ghana Business School (UGBS), Professor Lord Mensah, has expressed scepticism regarding the vice president's promises of tax incentives for Ghanaian businesses.

Delivering his vision statement to the nation as flagbearer of the NPP, Vice President Dr Mahamudu Bawumia announced that his government would introduce a new friendly tax regime aimed at boosting businesses and making the private sector competitive.

His plan includes introducing a flat tax system, granting tax amnesty, and eliminating human intervention in tax audits to foster a business-friendly environment.

Additionally, Dr Bawumia plans to abolish certain taxes, like the E-Levy, to promote a cashless economy and adjust importation rates and port charges to surpass regional competitors.

However, in a recent tweet dated March 22, 2024, Prof. Mensah highlighted the fiscal constraints that may hinder the implementation of such incentives, especially in an economy reliant on treasury bills for financing.

He doubted the feasibility of the vice president's proposed tax policies, suggesting that the government's limited financial leeway could be a significant obstacle.

“I don’t think the vice president would have the fiscal space to grant the tax incentives he is promising Ghanaian businesses. It will be difficult to provide tax incentives in a country with treasury bills as the only source of financing,” he posted.

Professor Lord Mensah’s remarks join the conversation about the practicality of tax relief measures and their impact on the nation's economic strategy.

Meanwhile, Ghana's 2024 general elections are scheduled for December 7, 2024. This election will see Ghanaians vote for a new president and members of Parliament.

As the election approaches, there is a focus on various issues, including the economy, infrastructure development, and social policies.

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I don’t think the vice president would have the fiscal space to grant the tax incentives he is promising Ghanaian Businesses. It will be difficult to provide tax incentives in a country with treasury bills as the only source of financing.

— The Prof (@stigue2001) March 22, 2024