Indirect taxes adds to cost of businesses - Mr Nakyea

Mr Abdallah Ali Nakyea, the Managing Partner Ali-Nakyea and Associates, has said indirect taxes add to the cost of doing business in the country because corporate institutions transfer such taxes to consumers.

He said this had a direct effect on the cost of commodities on the market.
He said this in a presentation at the Multi-Stakeholder Business Integrity Forum (MSBIF) held in Accra.

The event was held under the theme: "Implications of government fiscal policies for business in 2020 year of assessment".

He said such indirect taxes include the upward adjustment in the Communication Service Tax (CST) rate from six percent to nine percent and the upward adjustment in the Energy Sector Levy (ESL) with respect to power generation and Infrastructure Support Levy, the Road Fund levy and the Price Stabilisation and Recovery levy.

He said if these levies were properly applied to their intended purposes, business should reap the benefits of stable energy supply and safe and secure use of communication services.

He called on government to hold stakeholder consultations with businesses and look at the current structure where taxpayers are classified into large taxpayers, medium taxpayers and small tax payers with each class handled by a distinct tax office.

He said taxpayer education, introduction of Electronic Point of Sale (EPOs), use of third party biometrically verified data, re-examination of the tax appeal processes and review of the tax exemptions regime would reduce the tax burden on businesses.

Professor Godfred A. Bokpin, Lecturer University of Ghana Business School, said lack of sustained macroeconomic stability, is a prerequisite for economic and social transformation, which has hindered private sector competitiveness.

He said the painful cost of fiscal adjustment and consolidation was accommodated through private sector balance sheet and denied the space for expansion, which made them more vulnerable to external competition.

Mrs Linda Ofori-Kwafo, Executive Director, Ghana Integrity Initiative (GII), said the MSBIF formed part of GII's ongoing project aimed at creating the needed platform for a cross section of stake holders particularly, selected private sector and public sector institutions, civil society organisations and media to identify emerging issues hampering the ease of doing business in Ghana.

She said this would also map out strategies to help in policy advocacy with the aim to reverse the status quo.