AGI to resist increase of VAT rate to fund political parties

Accra, Aug. 28, GNA - The Association of Ghana Industry (AGI) on Wednesday said it would resist any attempt to increase the Value Added Tax (VAT) rate to fund political parties.

"The harsh economic situation and the high tax rate have reduced the liquidity portfolio of most industries and any additional tax will be the last straw to break us," Mr Ben Kumah, AGI Executive Member, stated at the national consultative forum held in Accra on state funding of political parties.

Mr Kumah said the AGI was, however, prepared to make voluntary contributions to a recognized fund or foundation towards sustaining multi-party democracy.

"This will also reduce the tendency of political parties knocking at our doors for funds and if you refuse, they penalise you when they win power."

The forum seeks to build consensus on the way forward for the financing of political parties and the electoral process, how to provide resources for the parties to make them more effective and examination of the challenges of financing elections in the country.

About 100 participants comprising representatives of political parties, the Trades Union Congress, security organisations, professional organisations and chiefs attended the forum, which was organised, by the electoral Commission (EC) and KAB Consult, a non-governmental organisation (NGO). USAID provided the funds.

Mr Kumah cautioned: "The day we allow political parties to be run as business entities will be the end of democracy as it will be the survival of the fittest contest."

He said state funding was necessary to enable the parties to shape the political will of the people and empower them to exercise their franchise wisely.

The General-Secretary of the Great Consolidated Popular Party, Mr John Ameka said public funding of the parties would promote peace and tranquillity, as it would assure the politicians that their parties could win power through the ballot box rather than war.

He suggested that a law should be passed to make it mandatory for both local and foreign companies to contribute to the fund.

Speaking on: "Challenges of Public Funding of Political Parties", Professor Kofi Kumado, Director, Legon Centre for International Affairs (LECIA), said the debate should focus on additional funding as the state already provided a form of support to the parties.

He said since 1992, the state, through the EC, has assisted the political parties with vehicles, tax relief, logistical support and free media and airtime to propagate their political agenda.

Prof. Kumado urged the political parties to justify the need for additional funding as assessment of their audited accounts submitted to the EC made it difficult to justify state funding.

He said some parties claimed that they spent only 200,000 cedis for each parliamentary candidate during the elections adding; "unless the parties are not telling the truth, this budget should be within the means of any serious minded political party".

He also said the VAT rate should not be increased, adding that the VAT issue is a non-starter attempt, as it would only mean that "we are concerned with the ruling classes and not the ordinarily man on the streets".

He also called for a National Referendum on Additional Funding of Political Parties, as it would be unjustifiable for either Parliament or the Executive to approve such a fund.

"They stand to benefit from the fund and one wonders which interest will supersede the other?" Professor Kumado asked. 28 Aug. 2003