We're seeing 'the worst', 'most puntive' tax regime ever – Terkper

Former Finance Minister Seth Terkper has said Ghana is witnessing “the worst" tax system ever.

"It is the most punitive and worst tax structure that we have had", he said in a recent media interview.

"And as with every tax that is punitive, you will end up not collecting, or generating as much revenue as possible,” Mr Terkper pointed out.

“But more importantly", Mr Terkper noted, is that "when you begin to introduce punitive taxes, taxpayers find ways and means of evading and avoiding the tax".

"So, if you have a simplified tax regime it is better and compliance increases", he argued. "And the evidence is that if you look at our tax-to-GDP ratio -- well, until recently as GRA is claiming -- the highest point at which revenue was collected was 2015 per the percentage of GDP, not nominal terms", Mr Terkper told Accra-based Citi FM.

His comment comes on the back of the implementation of two new taxes -- a 15 per cent VAT on electricity and and emission tax.

Organised Labour threatened a nationwide demonstration over the VAT.

The government subsequently backtracked.

The minority caucus, in late last year, accused the Akufo-Addo government of having introduced some 50 new taxes since 2017.

“Mr. Speaker, you recall in 2017 this same Finance Minister told this House that they were removing so-called ‘nuisance taxes.’ That was a hoax! Today, we are witnessing an epidemic of nuisance taxes, taxes, and more taxes", Minority Leader Cassiel Ato Forson told parliament in his concluding remarks on the 2024 budget debate on the floor of Parliament on Wednesday, 29 November 2023.

“This government has burdened Ghanaians with over 50 taxes despite their promise ‘to shift the economy from taxation to production.’ Mr. Speaker, notwithstanding the over 50 taxes imposed by this government since 2017, this 2024 budget is introducing additional taxes worth GH¢11 billion,” Dr Forson added.

“Mr. Speaker, any additional tax will worsen the extreme poverty in our dear country. We cannot support these new taxes because they will put an extra burden on businesses. Already, businesses are collapsing because of the high cost of doing business in Ghana.”

“We cannot support these new taxes because currently, tax exemptions pending before the Finance Committee amounts to GH¢5.5 billion, equivalent to USD449 million", Dr Forson emphasised.