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| Dr. Omane Boamah |
Communications
minister Dr. Omane Boamah has reiterated government's promise not to increase
taxes if re-elected.
Omane Boamah
said instead of increasing taxes, government will seek new ways to widen the
tax net to bring in new tax-payers.
"You
realise that in this manifesto we haven't spoken of increasing any tax,"
he said on Joy FM's Super Morning Show Tuesday and stressed government has a
realistic plan to keep this promise.
The
government has been criticised by leaders of the opposition NPP, mainly former
Deputy Governor of the Bank of Ghana Dr. Mahamudu Bawumia who is NPP
Vice-Presidential candidate. He criticised government after it announced in
2015 that it was introducing new taxes placed on condoms, cutlasses and
savings.
Government
after public outcry in 2016 had to backtrack on plans to introduce 1%
withholding tax imposed on interest earned on individual investments.
But
announcing a change of strategy, Dr. Omane Boamah laid down the plan not to
raise taxes. He explained it will be based on job creation, electronic means of
widening the tax net and keeping a net freeze on public sector employment.
Explaining
the net freeze, he said government will only employ as replacement for a
retiring and resigning staff in the public sector.
This will be
strictly complied with in all public sector jobs except health and education
where government expects to recruit new medical professionals and teachers, the
minister said.
Omane Boamah
explained that this means once the wage bill is controlled, it will not consume
as much as 49.2% of the tax revenue it currently does. Even better, government
plans to slash the wage bill to 35% of tax revenue so there is less pressure on
public finances from payroll demands.
He also
stressed, government is improving the efficiency in tax collection. "We
have considerably automated systems [of the Ghana Revenue Authority]," he
said.
He indicated
that the Registrar-General's Department which registers businesses in Ghana is
being linked to the Ghana Revenue Authority so it can identify new businesses
to collect taxes.
"Just
by these efficiencies alone....electronically you are reaching a wider
scope," he assured.
A prominent
feature in the plan to keep taxes is public and private sector job creation. He
referred to the new University of Ghana hospital, the Greater Accra regional
hospital and other hospitals in the Ashanti region will need new intake of
medical professionals.
"If
more hospitals are coming up it means there are opportunities for job
creation," Omane Boamah said and more jobs means more taxes for
government.
He said the
private sector, for example, will be key to the development of an integrated
aluminium industry which can generate several jobs.
The
government's plan to maintain the current tax regime if elected is in contrast
with the main opposition party's plan to aggresively cut or review at least 10
taxes.
The party
has explained in its 2016 Manifesto that the deliberate plan to shift the focus
of economic policy from taxation to production will lead to:
i.
reducing
the corporate tax rate from 25% to 20%;
ii.
removing
import duties on raw materials and machinery for production within the context
of the ECOWAS Common External Tariff (CET) Protocol;
iii.
abolishing
the Special Import Levy;
iv.
abolishing
the 17.5% VAT on imported medicines not produced in the country
v.
abolishing
the 17.5% VAT on Financial Services;
vi.
abolishing
the 5% VAT on Real Estate sales;
vii.
abolishing
the 17.5% VAT on domestic airline tickets;
viii.
reducing
VAT for micro and small enterprises from the current 17.5% to the 3% Flat Rate
VAT introduced by the Kufuor-led NPP government;
ix.
introducing
tax credits and other incentives for businesses that hire young graduates from
tertiary institutions; and
x. reviewing
withholding taxes imposed on various sectors (including the mining sector) that
have constrained the liquidity of many businesses.
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