Tax cuts recipe for disaster – Terkper

A former Finance Minister Seth Terkper is predicting doom for the economy of Ghana following a number of tax cuts and reductions.

According to him, scrapping nine taxes and reducing three is a recipe for disaster for the country.

The Finance Minister Ken Ofori Atta on Thursday, March 02, 2017 announced major tax cuts in government’s first budget presented to Parliament. The tax cuts are in fulfilment of promises made by the Akufo-Addo-led government ahead of the 2016 elections.

The tax cuts include the scrapping of the 1% Special Import Levy, Kayayei Market Tolls, 17.5% VAT/NHIL on financial services, 17.5 % VAT/NHIL on selected imported medicines, that are not produced locally, Duty on imported Spare parts.

Mr. Terkper argued Ghana should be prepared for dire repercussions, adding expunging tax on auto spare parts will breed smuggling and deprive the Akufo-Addo government of the required revenue for development.

He advised government to think through its tax cut policies before implementing them.

However, Mr. Ofori-Atta said the tax cut is expected to bring relief to Ghanaians and help transform the economy.

The government in its 2017 budget also announced 456 million cedis for the fulfilment of its one district-one factory campaign pledge.

The government has also announced a 94 million cedis for the commencement of its one-village one dam campaign pledge expected to take off later this year.